There are three companies which dominate the technology world that is Apple, Microsoft, and Google. In 2016, Google almost took the number one spot away from Apple. One thing that confuses a lot of people I how does this company get to make money considering it doesn't sell any tangible products such as Apple and Microsoft.
How does google make money
Even if you use Apple products one way or another, you always end up using Google products. One or another you end up using YouTube, Gmail, Google Search, Picasa, Earth,, Mobiles apps, and Google Maps. It has come to a point where even when some companies such as Cyanogen try and compete with this giant they end up failing miserably.

Before we even get to the money making part let's take a closer look at this company. If you didn't know Alphabet is the mother company of Google. Alphabet not only deals in software applications but also hardware such as Chromecast, Chromebook, the Google Home Activated Speaker, and even self-driving cars. However, these products do not even come close to the amount of revenue which the search engine generates.

Where does Google get its money?
The question that lingers on everyone's mind where does the biggest search engine get its money? Most of the products which are offered by the company are free? One thing you should know is that it might seem you are not paying for the products, but you are. The question is how? The answer is straightforward ads. The major products from this company such as Search, YouTube, and Maps mainly revolves around advertising. Their revenue comes mostly from three components: AdWords, AdSense, and AdMob.

If you still don't get it then here is it works.  The advertising business is divided into two broad categories: brand and performance. Brand deals with texts, images, and video advertisements. These products help to build an advertiser's brand. For instance in 2016 Googles own products were worth $68.8 billion out of $90.3 billion of the total revenue which was collected. Youtube search has immensely been increasing the number of tax which is received by Google over the past couple of years.

On the other hand, performance advertising is when it delivers relevant content which will link a user to the advertiser directly. Once a user engages with the performance advertiser, the later pays the company.

Have you ever noticed that every time you are using the search engine, there are always ads which are popping?  AdWords is a viral platform, and it earns the company a lot of revenue. AdWords gives you a chance to advertise your business products and services on the website. Every time you click on those AdWords the company gets paid by its sponsors. For instance, if you are searching for "football," then it will find ads which are relevant to "football."  

AdSense also generates a lot of revenue for the company. Google Network Members use AdSense to display relevant ads on their websites once visitors are drawn to the sites and click on the ads, the company earns money. AdMob is just like AdSense, but it only functions in mobile apps.  

What are Paid Clicks?
As mentioned earlier the advertisement business is divided into two categories which are brand and performance. When the company wants to measure  performance it relies heavily on two critical metrics:
  • Paid Clicks.
  • Cost per click for Google AdWords.

1. Paid Per Clicks.
Paid per clicks is the primary business earning revenue for the company. It is majorly concerned with the bidding of advertisements and whichever ad has the most clicks is ranked at the top. One thing you should know is that this bidding model was borrowed from Overturn. There are three categories of laid per click:

Paid click on Google Network.
These include adverts from AdSense for Content, AdWords for Search and AdMob.

Paid Click on
These include clicks which are related to end users and the properties of the site.

Paid Clicks on other Google properties.
These include clicks on other owned properties by the company such as YouTube, Gmail, Google Maps and Google Play.

 2. What is Cost per click?
This refers to the average amount of charges which the company charges its advertisers once they engage with their users.  In a nutshell, if nobody clicks on your ad, then you do not pay anything.  Therefore to increase the number of clicks you need to ensure that your ad is of good quality.

Google's revenue growth is something that you should keep tabs watching. There are several factors which have contributed to the growth of this revenue. They include:
  • Fee advertisers are willing to pay.
  • Competition of keywords by advertisers.
  • The high-quality rate in advertisement format.
  • The growth rate from other owned properties such as YouTube.
  • The ever-changing economic conditions.
  • Significant traffic growth in the number of advertisements.

However, it is good to note that Google does not only derive its revenue from ads but from other properties such as:
  • Hardware.
  • In-app purchases from Google Play.
  • Google cloud.
  • The alphabet is also looking to increase its revenue from "other bets" such as
  • Internet services.
  • TV subscriptions.
  • Nest branded hardware.
  • Licensing and R&D services.
The future looks bright for this company, and that is a how Google earns money.

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