How Does Google Make Money

EXPOSED: How Google Makes Money

How Google Makes Money

How Google Makes Money

Last year ALL the tv advertising combined made a whopping… 72.2 BILLION Dollars…

That is an average of $197 MILLION dollars per day… pretty crazy right… but it gets more interesting than that…

because in the same year… google alone generated over 2X that much for a earth shattering…

$160 BILLION Dollars…

thats almost $500 MILLION a day.

and they didnt have to pay fancy actor sallaries, huge film crew budgets, or even fight for your attention on tv.

but how does google make all this money and is there a way you can get in on the action to make money with google?

stay tuned for a whole breakdown… PLUS ill be showing you 5 killer ways to make money using what you learn.

Part One: Understanding The Google Business Model

let’s go ahead and dive into part number one, which is the Google business model in order to get you into the Google business model… I got to take you a little bit back in time around the time I first started my Internet marketing career and business. Now, the domain name Google.com was registered on September 15th, 1997. At that time, we had findwhat, hotbot, Lycos. Excite, goto, overture, Yahoo!, Ask Jeeves, AltaVista and several other search engine companies all fighting for attention and ways to make money.

Now, Google’s mission at that time was to make search engines better and provide a simple easy to use straightforward approach.

All the other search engines at that time had a bunch of clutter, all kinds of stuff to click on.

What Google focused on was good search results. Now, this company started out of a college or two college buddies got together and said, hey, let’s start a search engine based on what we know about algorithms and math and research papers, research papers, what how does it have anything to do with it?

Well, Google stumbled upon something very interesting, you see, when you write a research paper in college, what you have to do is at the bottom of that research paper, you have to site your work.

So you have to say, hey, you know what I read from this guy, this guy, this guy, this book and this Web site, and you have to site your work. Now Google went in and said, hey, wait a minute. If everyone is writing papers on a certain thing and they all site one person as the go to, well, then I think that go to is probably what people want to read about. This is where they came up with the page rank algorithm. This is where you go out there. And basically on Google, Google cares more about what other people’s say about your Web site than what you say. Now, back then, they had this idea of a search engine in mind. They didn’t have a whole lot of money. And back then, advertising online was not a big deal. It was actually nonexistent. However, you did have companies pouring millions and millions of dollars into building Web sites.

October 1994 Hotwired Sells Banner Ads

first banner ad

first banner ad (pictured above)

44% CTR And Surprisingly STILL 18X The Average CTR

Now, on October of 1994, Hotwire sells what is credited to be the first ever banner ad. What’s a banner ad? Well, it’s like a banner ad like this, which actually this is credited as the first banner ad by AT&T. It said, Have you ever clicked your mouse? Right here you will. Now, back then, banner advertising was brand new. And this banner ad got a whopping 44 percent click the rate. That means if one hundred people saw the ad, 44 clicked on it. Now, you might be saying you Barcus. That’s that’s because it’s all, you know, new back then. But actually, they did tests recently and they found out that this same ugly banner ad still got 18 times the average click through rate of regular banner ads. (more about this later)

Google, here they are, the year 2000. They’re starting to grow. Right. They’re like, hey, we’re grown. This Internet thing is is not just a fad. It’s not just something silly. They’re growing to about 60 million searches per day, which back then that was pretty big. Right. And they’re getting 60 million people to search on Google every day. So 60 million people go to Google, they type in. How do I cook a Turkey or what’s the latest mortgage rate or what are the stock prices? And they go to Google to search for various things. And Google is like, whoa, wait a minute, this is really cool. There’s like 60 million people doing this. But I remember there was like a banner ad guy and he didn’t make that much money. So how can we make money off of 60 million searches a day?

60,000,000 Searches Per Day (2000)

how google makes money

Well, a guy back there was looking at the results of Google and he said – what if we allowed companies to advertise?

October 23, 2000 – ADWORDS LAUNCH

What if what if we said, hey, you guys can advertise? And instead of just a banner ad that’s generic for everyone? What if I could say I only want to advertise for the word mortgage or maybe mortgage San Diego or maybe I want to advertise for the word weight loss or how to cook a turkey. And thus, on October twenty third, the year 2000 was the launch of Google AdWords. There was about 300 people that were in on the first launch. I got an AdWords couple of years later and there we go. They were making money.

Now let me show you how this works. So the way that it works is Google is like, hey, wait a minute, we got these people search in Google. How are we going to make money? Well, we also know that advertisers are paying a lot of money, right? They’re out there. They’re paying money. And and they’re paying a lot of money. Advertising is a huge industry. So, what if, instead of just showing results on Google for, like stocks or whatever? What if we allowed these advertisers to buy ads on whatever keyword they wanted? So if you want to show up, it was like AOL keywords back then. If you wanted to show up for stocks, you could actually show up. And we’ll put your ads above the results for stocks. And now what happened is the advertiser was allowed to say, hey, I’m willing to pay a certain amount every time my ad is clicked on.

Now, again, remember, they were getting 60 million searches a day back then.

And if the ads were not clicked, they wouldn’t make money and the advertisers wouldn’t spend money. But lucky for them, like 10 percent or more actually clicked on the ads. And now they’re monetizing six million searches a day or somewhere around that.

So the advertisers were there and they’re willing to pay a big bunch of money for these search results because they know, hey, if I get someone looking for mortgage and they come to my Website, I could probably sell a mortgage.

Pretty simple. So that’s the basic of how CPC works. And it’s on a bid model. Obviously, words related to mortgage or stock market or refinance are going to be more expensive than words about how to cook a turkey.

So we’ve got understand that. But overall, Google is making a fortune on sponsored listings. Why? Because these advertisers have money and they want to spend it. Very important. So the CPC model puts the ads above the searches and starts to make good money. Pretty simple! Now, that was the basic of it. And that was about it right there. Like, hey, this is cool. We’re making millions of dollars now.

I think the first year with AdWords, they made like 70 million dollars, which for a little startup, that was pretty cool.

how google adsense makes money

And the guy behind the curtain there was looking at this stuff and he’s like, well, this is good.

But most people aren’t clicking the ads. Like, 90 percent of the people are actually clicking the free results and they’re just getting free information.

We made 70 million, but maybe we could make more. And so they said, what if there was a way to put these ads that are on Google Adwords on other Websites.

June 18, 2003 ADSENSE Released

This is genius – How Google Makes Money!

If you think about this little aha moment here, I credit this as the big genius behind Google because now they’re taking all the sites that they’re giving free traffic to any way. And they’re like, hey, you want to make money with your site? Put this little code on your site and you can get paid when people click on the ads on your site. In June 18th of the year 2000, ad sense was released. Now, what is adsense? Let’s talk about how the adsense model works, because I’m sure you’ve seen ads that say ads by Google or Ad Choices or something like that.

example google adsense ad block

google banner ad

Like The Banner Ad But Dynamic, Targeted,
And Automated With Advertisers Ready To Buy

And when we look at this, we all see these probably a couple hundred times a day if you’re a nutcase like me and you work online. And so we look at this and they’re like, wait a minute, check this out. So here we got this stuff and we got these searches and these guys are paying for the ads. All right. But what about the people who just click on the free stuff? What are we gonna do? Like, this guy clicks on this and he goes to let’s get that back up there. And he goes to Markus’s Web site and Markus’s, he’s just got this Web site about, you know, hospital bills or whatever. And what’s he going to do with it? All right. He’s got his site. Maybe he runs affiliate offers or whatever.

But what if we provided a code where he could put the code and it will actually show the ads from these advertisers with a cost per click model? Obviously, it’s not going to be the same cost per click as someone going to Google and searching for something. But I’ll bet advertisers are willing to pay a pretty penny. So Google comes to the Web site owner and they’re like, hey, did how would you like to make some money? You’re like, yeah, I’d like to make some money. That’s pretty cool. Sign up for ads. Since you get a code, you put it on your site. It shows the ads. Now, what’s happening is they’re getting paid on the sponsored results. And then if you don’t click the sponsored results and you go to different owned Web site, now, you can also see the sponsored results. But in a different way.

Now, the way this works is on a CPC basis where you’re actually making the amount per click and you could see some of these terms here are paid like tons, right? We got like nine dollars a click. Eleven dollars a click. Five dollars a click $5.40 a click. Fourteen bucks a click. And more. And obviously, as the ad since publisher, you’re going to get a portion of whatever it is you’re paying.

And the advertisers happy because you’re getting the traffic that he wants and the Web site owner is happy because he’s making money. So now they have this huge empire and it’s 2003 and they’re making money and they’re happy. And tons of Web sites adopt the Google ad sense program. And they put the ads on their site and they start making really good money. Now, this was a lot like the banner ad, but it was dynamic because, see, Google’s key was the fact that they had a big brain behind everything that ran stuff. So instead of just going to excite or Yahoo! Or The Times dot com or New York Times or L.A. Times or wherever I want to advertise, I could actually say I only want to advertise on Web sites or pages that are about a certain topic. And so what happened was Google ad sense was the reverse of search engine optimization. So instead of the search engine coming and looking for sites about a topic, they’re taking your site and saying, I think this site’s about this topic. Let’s show these ads and UN and like the banner ad, but dynamic, targeted and automated with advertisers ready to buy because they already had this huge list of advertisers. All they had to do is make the code and bam, the cost per click model was in full running. Now, these are the two platforms that drive the bulk of Google’s. This is it. Right. Like 80 to 90 percent of the revenue that Google generates is from these platforms.

These Two Platforms Drive The BULK Of Googles Revenue

2006 Google Buys Youtube For 1.6 Billion Dollars

YOUTUBE EARNING MODEL EXPLAINED

In 2006, people thought Google was crazy. They were like, you’re going to buy this little startup company called YouTube for one point six billion dollars. That was one of the biggest acquisitions in all of history. And they’re like, we’re going to Hlophe out one point six billion bucks for this YouTube thing. Now, Google saw things that other people didn’t see. They said, well, wait a minute. People are watching video online. People are watching tons of video online. I think there’s a way to make money. So Google buys YouTube. Now, again, remember, there’s two models are the way it works. Now, what happens is instead of Google and Google ads, you now can go through the Google ads platform as an advertiser and you say, you know what, I want to show up on Google. But I also want to show up on videos like I want to show up on videos. So I want to be on videos that people are watching that are about the stock market or money or whatever it is. And so what happens is they use this fancy algorithm and it says, hey, we’re gonna show you on a cost per click or cost per view metrics or you pay per view or you pay per click. And every time someone watches this video about the stock market, your ads is going to show up. And if they watch 20 seconds or click on the thing, you’re going to get paid. Pretty cool, right? They’re like, whoa, wait a minute. I can now advertise in front of all these people. It’s like TV advertising, but I don’t have to have millions of dollars to run an ad. And I can reach more people than the million dollar ad and I can get the people that I want. I don’t have to get everyone watching the Super Bowl. I can get people in Idaho who are watching videos about stair lifts.

Seriously, this simple stuff. And now we can make this work. And so they go out there and they’re like, yeah, let’s do the CPC model. Right. We’ll run some ads on these videos and we’re going to make a bunch of money. And they did. They made a ton of money. And then they went out there and they said, well, you know, these guys are working hard to make all these videos. So what if we did like the ad sense platform? And what if when you create a video we actually shared some of this money with you? Right. What if the advertiser pays a certain amount and we split that with the guy who makes the video? Because obviously without videos, YouTube is nothing, right? Nobody wants to go to a site about videos that doesn’t have any videos. So the content publishers are the ones that get to share the revenue. So now we have incentivized Web site owners and we’ve incentivized video creators and we’re basically taking over like 90 percent of the Internet. I mean, think about this. This is some genius level shit right here. And they’re like, wait a minute, we can make this work. And that’s how the YouTube earning model works. The advertisers pay for views and clicks from videos and there they go. Now, how does this work in real time? Has the money made? How does this whole thing work? Well, right now, as of today, 20 something years or 20 years after the launch of Google. Twenty six years or twenty three years. There we go. I can do math, right? I promise you, I can do math. So twenty three years after the start of Google, when they were getting 60 million searches a day, which was crazy today in the year 2020, they’re getting 5.5 billion searches per day.

5.5 billion. Let that sink in. That’s sixty three thousand searches per second.

Part Two: How Money Is Made In Real-time

5,500,000,000 Searches Per Day Or 63,000 Per Second

5 Billion Videos Watched Every Day

EST 2,000,000,000 Youtube Users

these people search and Google. They click on the ads. I have an AdWords account as an advertiser. I go out there and I say I’m willing to pay a dollar a click. Some of those clicks come to me. I pay money. I’ve actually paid over one point four million dollars to the AdWords program. And I’ve also made money with ads since couple hundred thousand dollars with that. And so we look at it, we’re like, wait a minute. If little Mark is in his backyard office and somewhere in Florida, spent a million, five almost on ads, imagine what other companies are spending and imagine how quick this starts to add up. And you could see how valuable the 5.5 billion searches a day are worth. And then we look at it.

We’re like on top of that, they’re also getting five billion videos watched every day, like five billion videos. That’s almost one video view for every person on planet Earth. And not everyone has Internet access. And so we look at this. There’s also an estimated two billion YouTube users. And we look behind the scenes and we say, well, what are these guys paying? What are they paying? Now, if you use the Google AdWords tool, it’ll give you a rough estimate of what people are paying for certain keywords. So if we were to look at like best home security system, it’s like eleven dollars a click.

If you’re getting five billion searches a day and like some of those clicks go to best home security. That’s a lot of money. And what we have to look at is you have to stop looking at. This is just some dumb keyword and some advertiser paying money. And we have to look at it as inventory because to Google, it’s kind of like when you go on a grocery store, you go in the grocery store and you see a thing on a shelf. Right. It’s like Cajun fried food mix or whatever. I like Cajun food and I like to fry food, too. And so when they got this and they’re like, hey, that Cajun fried food mix, that little spot on the shelf generates a thousand dollars a month or whatever it is. Right. And they look at it as every square inch is inventory. So they look at it, they’re like, hey, if no one buys it, we get rid of it and we put some else in there.

So we look at this in home security system is like inventory gets twenty two thousand average average monthly searches.

That means twenty two thousand people a month search. Best home security system in Google. Out of that, a lot of them probably click the ads, since this is a commercial and tech keyword and the suggested bid is eleven to 15 to even 30 dollars a click. So if they get 10 percent of them, that’s two thousand people every month. Two thousand people will have to do some math here. It’s kind of early times. Eleven dollars a click. That keyword is worth a whopping twenty two thousand dollars. Think about that for a minute. And that’s one key word of about five billion searches done every day. That’s not even a thousand searches a day, guys. This is nothing. There’s tons of other keywords people are typing in and tons of other money that’s happening. And it’s all automated because I go as an AdWords publisher and I say, I’m going to put my credit card in. I’m going to spend a hundred dollars a day. I want this keyword and thousands and millions of other people are doing the exact same thing.

And Google is making a ton of money. Very brilliant business model. All right. We could see some other keywords like ways to invest in gold or alcohol rehab, alcohol rehab.

I’ve seen these words go for upwards of 100 or 200 dollars per click. Google is literally selling clicks that would not exist. If the power went out, you wouldn’t even be there. And so this business model is absolutely astonishing and it shows us how the Internet is changing things. So if we look at the real time business model, what we’re looking at is all these advertisers are paying. And Google has all these crazy algorithms that are saying this guy’s paying a dollar a click. This guy’s paying ten dollars a click. This guy’s paying one hundred dollars a click. And they’re going to go through. And when they’re on ad sense, they’re splitting it between the ad cents publisher and the Web site. And the algorithm does all the work. And Google is pretty much laughing all the way to the bank. Right. I don’t think they need to drive to the bank. They probably are a bank, right? Not really. But you guys see how this works. And that is the key to how making money works. And we look at this and we look at a business model that’s making one hundred and sixty billion dollars a year. That’s insane.

This company, as I showed earlier, was valued at a trillion dollars. For what?

For selling clicks. Let that sink in a minute.

They’re selling Web site clicks if you’re flabbergasted and you’re like, holy crap, I didn’t even think about this. I thought Google, Amazon and other big companies. That’s it. But really, they’re just selling clicks to advertisers. That’s what they’re doing. That’s where their money comes from. And we look at it, we’re like, wait a minute. If a company like that can make one hundred and sixty billion dollars a year, can’t I make a couple grand a month from the comfort of my own home?

Yeah, I think you can. Now, part three. Let’s get into what happens behind the curtain. And if you like this video, subscribe click the bell. Give us a big thumbs up and put a comment below of your favorite thing you learned. Now what happens behind the curtain wall? Behind the curtain? They have like this big Google computer. I think it looks like an octopus. That’s that’s what shows up in my brain. Right. And he’s out there and he’s making codes and trackers and targeteers and algorithms and pay checks to people.

Part Three: What Happens Behind The Curtain

If you’re an adsense publisher, you get a paycheck. If you’re an adwords advertiser, you get Bill. They’ve got reverse SEO. They’ve got video views calculator. They got ad views paid for. They got all this stuff. And on and on we go. All this is happening behind the scenes. So next time you see an ad block, lot of people are annoyed at ad blocks. But I actually love ad blocks and I look at it. I’m like, I want to look at this to see what’s going on. I want to see what people are doing, because there’s people just like you and me that have Web sites that are making millions of dollars a year or millions of dollars a month.

Some of them that are out there and they’re doing this exact same thing now. Will you make a million dollars a year or a million dollars a month? I have no idea. This is a business. We don’t know what’s going to happen. When Google started, it was a risk they might have made nothing, but they had some big brains that said, hey, we’re gonna make some money, we’re gonna do this, we’re gonna make it happen. And so we can do this and we’re gonna show you how. Stay tuned. We got five ways to make money using this method coming right up.

Part four. Here’s five ways to earn with what you learned today.

Now here are some Alexa screenshots.

Alexa ranks Web sites based on popularity. Number one is the most popular site. Number billion is like not so popular. Probably doesn’t get that many views. Google is the number one Web site on planet Earth. There is no Web site that gets more traffic than Google. You want to know what number two is? Number two is YouTube. Talk about domination here. Talk about running the market.

The fact is Google gets lots of traffic.

And yes, this is my dog. I was doing a video and she decided to pick up the sign that it was pretty cute.

So I put a picture of her on there. Now she’s like three years old and she’s kind of annoying, but we still love her anyway, even when she goes in the pool and brings half of the pool inside with her. At any rate, Google gets lots of traffic. I want you to put that in your brain. Google gets lots of traffic.

So here are five ways that you can make money with what you learned today.

Number one, you can create a blog or Web site that gets traffic and you can monetize it with ads. Since you could set up a blog. You could get some traffic. You put the ad sense code on the little Google octopus, does all its magic, puts the ads on there. And when the ads get clicked, you get a paycheck. I know I get paychecks all the time from them. Pretty cool. Some of the examples of sites that do this are Mashable, Digg, eHow and countless other small publishers. People just like you and me that are raking it in big time. Some of these companies I read about one that’s doing 10 million dollars a month. That’s a big company. But that’s the same business model and I made this video for you because I want you to understand the business model, because if you can understand how this works. You’re 90 percent of the way to being able to make money on your own. But most people won’t go out there and do the work to understand how this works.

Now, number two, the second way to make money with this is to create a YouTube channel and monetize it with YouTube ads. You see Pudi pipe. Mr. Beest meditation channels, info channels and more. Some of these are making like one hundred thousand dollars or more. Some of them making a million dollars a month with ads. Now, again, results not typical, implied or guaranteed. Those dudes worked their ass off. Some ass working off. There’s some luck. There’s a lot of things involved in making this work. But if you want to make a couple thousand dollars a month, it’s not really that hard to do. If you really focus on the market and you focus on the traffic. Now, again, you’ve got to do the work. You gotta focus on it like a job. Google didn’t wake up one day and say, I’m just going to put together one page and get rich. Now, not gonna happen. You got to do the work. So number two is create a YouTube channel and monetize it with YouTube ads. Very simple.

You make a channel. You’ve got to get yourself. I think 4000 watch hours and 1000 subscribers. And then monetization shows up in your account. You click monetize videos and you get paid for each and every view that watches an ad. And it’s a good portion. Some people make a lot of money this way.

Number three, become a paper click arbitrage site. This is one of my favorites. What is a paper click arbitrage site? Well, a paperclip arbitrage site is the idea of buying traffic low and selling traffic high. If I can get traffic from people that are interested in something expensive home security and I can get traffic cheap. Then I can arbitrage this and bridge the gap and make the difference. Really cool. So think this way instead of trying to get traffic for home security systems. What if you got crime statistics by zip code and you made a site where people can look up crime statistics by their zip code and you want ads for home security systems? Think that way. Think different because it’s called flipping the market. You could do this really cool. Now, when you’re doing arbitrage, you got to make sure you follow all the rules on Google ad sense and buying traffic and all this.

But as long as you do it right, you can do pretty well. And I’ve made a lot of money with ads since arbitrage and affiliate arbitrage and all kinds of things. Some of the big companies that do this, you probably see them in your Facebook feed all the time. Yahoo! You see the ad where it says the latest luxury car and it’s got this car that looks crazy. You’re like, how is that even a car? And you click it and it’s got a bunch of ads about cars. Right. They do it all the time. Or maybe they’re like stair lifts or maybe they’re lose weight or maybe whatever. Right. And they have ads on their site.

Now, the key to being a paperclick arbitrage site is to get lots of people to click. Lots of times hands down. That’s that’s the way to do it. Yahoo! Does this. Forbes does it. Fiscal times, arophile. Lifehackelane, man break. And on and on we go. Lots of companies making lots of money with search arbitrage. This stuff doesn’t have to be as complicated as you think. It’s actually very simple.

Number four, the fourth way to make money is run Google ads to websites promoting a film that offers a lot of people are afraid to run ads, but actually it’s not that hard to do.

The cool thing about Google AdWords is they let you control it. You’re like, I’m going to pay a dollar click and I’m willing to spend five bucks a day. And you get five clicks and they’ll turn off and you go, I got five clicks. How much did I make? I made ten bucks. Could I have spent 10 bucks tomorrow? And you build and you grow. And you build. And you grow. And you make it very simple. And Google ads is insanely fast. You can go and put an ad up literally in like five minutes. It’ll be on Google in like five minutes. And you’re like, there’s my ad. There it is. It’s getting clicks.

And I’ve been able to do this to get hundreds of thousands of impression, actually. I think our biggest day was 20 million impressions. Tens of thousands of clicks from that. And it’s not that hard to do. And some of the traffic, it’s like two cents a click. And imagine if you could flip a two cent click into a five cent click or seven cent click. And that’s exactly how I’ve made millions of dollars online in a very simple way, just by understanding what people are searching for. Because Google understood that there’s someone behind every search.

There’s someone there. When you search for ways to lose weight, it’s not just some computer. It’s you searching for ways to lose weight. And you’re struggling and you’re having trouble or you search for ways to make money with affiliate marketing and you’re frustrated and you don’t know what to do. And you’re a person. And if I treat you like a person and I understand what you want, I could make a killing. And it’s not that hard to do. It’s actually very simple.

The fifth way to make money is to run broad ads on the Google Content Network. I’ve made millions of dollars with Google Content Network. The Google Content Network is what we showed you above where instead of running on Google, you’re actually running on other people’s websites, kind of like an automated algorithmic fancy pants banner ad. And you could literally get millions of impressions overnight, literally. Very simple to do. And you’ve got to go out there and you’ve got to focus. And if you use one or two or all of these ways, you can do this business, but you’ve got to understand how it works.

1. Create A Blog That Gets Traffic And Monetize It With Adsense
(mashable, digg, ehow, and countless other small publishers)

2. Create A Youtube Channel And Monetize It With Youtube Ads

(pewdiepie, mrbeast, meditation channels, info channels, ect)

3. Become A PPC Search Arbitrage Site

(yahoo, forbes, fiscaltimes, carophile, lifehacklane, manbreak, ect)

4. Run Google Ads To Websites Promoting Affiliate Offers

5. Run Broad Ads On The Google Content Network

 

2 Responses to How Does Google Make Money

  • Marcus….I found this site to be very interesting and am looking forward to your teaching step by step on how to dissect and utilize its information….”simplicity is genius”. Also please let me know the date and time of your next on line lesson……thanks

  • Are you direct linking with 2, 4 and 5? No site of my own needed in that case, correct?

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