Multi-sided platforMs
As a multi-sided platform Google has a very distinct revenue model. It makes
Google’s Key Resource is its search platform, which powers three diΩerent
money from one Customer Segment, advertisers, while subsidizing free
services: Web search (Google.com), advertising (AdWords), and third-party
oΩers to two other segments: Web surfers and content owners. This is logi-
content monetization (AdSense). These services are based on highly complex
cal because the more ads it displays to Web surfers, the more it earns from
proprietary search and matchmaking algorithms supported by an extensive
advertisers. Increased advertising earnings, in turn, motivates even more
IT infrastructure. Google’s three Key Activities can be defined as follows: (1)
content owners to become AdSense partners. Advertisers don’t directly buy
building and maintaining the search infrastructure, (2) managing the three
advertising space from Google. They bid on ad-related keywords associated
main services, and (3) promoting the platform to new users, content owners,
with either search terms or content on third party Web sites. The bidding
and advertisers.
patterns
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occurs through an AdWords auction service: the more popular a keyword, the more an advertiser has to pay for it. The substantial revenue that Google earns from AdWords allows it to continuously improve its free oΩers to search engine and AdSense users.
KP
KA
KR Google has one main Revenue Stream that subsidizes other oΩers (Revenue Stream is replaced by “free”)
bmgen_final.indd 81
VP
CR
CS
targeted ads
advertisers
free search
web surfers
monetizing content
KP
content owners
CH
KAplatform VP management, managing services, expanding reach
KR
CR
CS
targeted ads
advertisers
free search
web surfers
monetizing content
content owners
CH
search platform
R$
keyword auctions free
C$
platform costs
R$
keyword auctions free
6/15/10 5:35 PM