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Ever wonder how Google makes it's billions? Simple, it's called a bidding war. #google

Last updated 6 years ago

We all know that Google is the search engine of choice for most people [65% market share].  But have you ever wondered how they make $30+ billion in revenue and a whopping $10+ billion in profit [30% margin!!!!]?  

It's simple. They created a market where companies who want traffic/leads bid against each other for the prime ad space on the search results page for key phrases people use to search for things.  

Check out the infographic below by Wordstream for some of the most competitive bid categories like insurance and mortgage.  Those companies can afford to spend $45 for each consumer click [CPC] because of the high lifetime value of a customer [i.e. the bank makes tens of thousands in interest on your mortgage].  But don't forget that there are millions of other search terms that that companies buy which might not be as competitive but they drive a huge volume of searches and consequently a lot of revenue/profit to Google [e.g. Thai restaurat, AC repair, emergency vet, etc.].

 

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