How Google make money – Google Company Business Model

You may wonder how Youtubers make money when you watch their videos. But before that, you should understand How does Youtube make money? After that, we will know How Google Make Money. So Continue Reading.

To understand Youtube revenue you should know about the income of Google because the Youtube platform is a product of Google Inc.

This article is about the business model of Google. That is how this company makes money.

About Google company

Before knowing about Google revenue first talk about Google company and its business model. Google company founded in 1998 but on August 10, 2015, it announced its new company named Alphabet Inc.

Alphabet Inc is divided into two major subsidiaries.

1. Google
2. Other Bets

Google

In Google, all its major products such as Google Chrome, Playstore, Maps, Youtube, and many others products are included.

Other Bets

In other bets, all its other products and business are included. In these businesses Calico, Nest, Verily, Fiber, Makani, and CapitalG.

In simple words, Alphabet Inc is a holding company and its sub-branches are Google and Other Bets. Larry Page and Sergey Brin are co-founders of Google Inc. 

How Google Make Money

Now let’s talk about Google revenue details. Which company gives Google the maximum revenue?

The chart shows details.

In the above-mentioned chart, you will see that Google company earns 83.29% profit from advertisement.

Google Cloud, earns 5.51% revenue.

From Google’s other products, Google company earns 10.51% of total revenue.

Also, Read Facebook Monetization Complete Guide

Alphabet company earns 0.41% of total revenue from other Bets which are Google side businesses. This is a very small amount of income.

Now let’s talk about all these products in detail.

Google Advertsiment Revenue

Google earns major money from different types of advertising

Source: Statista

Let’s talk about this chart in detail.

Google revenue is increasing day by day. 

In this chart Google Search, Youtube ads, Google Network Members properties, and Google Advertising are as follows.

In the above chart, you will see that Google’s advertising revenue is increasing day by day. 

• In 2017 advertising revenue is $79.38 billion
• In 2018 it’s increased to $85.58 billion 
• In 2019 it increases to $116.46 billion which shows a hike in revenue.
• In 2020 Google’s advertising revenue increased to $134.81 billion which is higher than the previous year.
• In 2021 Google earns $209.49 billion which is double that of 2020.
• In 2022 Google earns $224.47 billion which is more as compared to 2021.

In this advertising revenue, two 3 major products are included which are

1. Google Adsense
2. Google Admob
3. Google Adwords

Google Adsense

This product is widely used by YouTubers and bloggers. Because if you want to earn money from Youtube, Blogger, or WordPress you need ads. 

So Google Adsense is a source that monetizes your videos and your articles on the website and gives you revenue.

Read Also How to Create Daraz Seller Account

In this field, Google company gives 68% or 51% of total revenue to publishers and the other goes to Google. 

Google Adsense has 2 million active customers. So the company earns a lot of money from this product.

Google Admob

This product is similar to Google AdSense. Admob is used for advertising on apps that are published on the Play store and AdSense is used for the monetization of YouTube videos and websites.

This graph shows the number of apps.

Source: Statista

According to Statista 2.68 million apps are available on the Play Store. Almost 99% of apps are monetized with AdMob ads.

This graph shows the number of apps.

So in this way, Google earns a lot of money from Google AdMob.

Google AdWords or Ads

 If someone wants to advertise its video or product then it uses Google AdWords or Google new product Ads.

For this product, you have to pay money to Google and it runs your ad campaign in ad form to customers. It helps you to increase your sales and engagement.

These ads are of different types.

• In-Stream ads
• Skippable ads
• Non-Skippable ads
• Search ads
• Banner ads
• Video ads

So in this way, Google generates a lot of revenue from advertisements. Because many companies used this product of google to run a campaign.

Note: Youtube non-advertising revenues are included in Google's other revenues.

Revenue from Google Services and Apps

Google Inc has so many apps and products. Some major are Google Maps, Blogger, News, Drive, Photos, Translator, Chrome, Andriod, and many more.

Google services generated almost $69.4 billion from its apps. Google has a wide range of products from which it earns a lot of income. On Blogger millions of blogs are published. As you see it’s 100% free but to earn from it you need google Adsense.

In reality, Google provides free products to its customers such as Blogger but when they use them then people want to earn money. In this case, they need google Adsense.

Revenue from Google Cloud

Google Cloud includes infrastructure and data analytics platforms, collaboration tools, and other services for enterprise customers. Most of the segment’s revenue comes from Google Cloud Platform services and Google Workspace (formerly known as G Suite) collaboration tools.

During Q4 FY 2021, Google Cloud generated $5.5 billion in revenue, representing about 7% of total revenue. Q4 FY 2020 was 44.6% higher than Q4 FY 2020. Despite posting an operating loss of $890 million during the quarter, the segment is still not profitable. That loss was smaller than the $1.2 billion operating loss reported a year ago.

Revenue from other Bets

Other Bets consist of several operations that are not individually material. Some of Alphabet’s Other Bets include Calico, Nest, Verily, Fiber, Makani, and Capital G. The segment generates revenue primarily from internet services and licensing.

From Youtube

Youtube is a product of Google. From this service, Google earns huge revenue. 

This revenue is increasing day by day because everyday new and new creators join youtube. So Google earns a lot of profit from it.

Google company earns money from Youtube in different ways

• Share from Advertisement
• Youtube Premium Subscription
• Youtube TV

Share from Advertisement

The major source of income is an advertisement. When a user monetizes videos then Google company provides ads. But in this case, Google gives half of the total revenue to its creators. The other half goes to Youtube.

Youtube Premium Subscription

If someone wants to watch Youtube without advertising. Then just like Netflix, you have to pay a certain amount of money. It gives you benefits like background video play and ad-free Youtube.

This chart shows that Youtube’s revenue is almost equal to Netflix

Source: Statista

Youtube TV

Youtube TV is also a major source of income for Google. 

In 2019, YouTube’s advertising revenue surpassed $15 billion, according to Statista. This is nine times what Google paid for it in 2006. It’s also more than any major TV network generated in 2018: NBC saw an ad revenue of $7 billion, CBS made $6 billion and Fox’s advertising revenue gave them a profit of $5 billion.

Conclusion

After viewing all stats and charts it shows that the major source of Google’s income is advertising. Google also uses our data when a user Signup for Google products it permits google to its data

Google uses this data to show target advertisements. 

FAQs

Now let’s discuss frequently asked questions about this article.

Samar Saqib

Hi, I am Samar Abbas Saqib. I am Tech Blogger. I am working in the Blogging field since 2017. I share tips and tricks related to Computer, Internet, Mobile, and Digital Marketing. My aim is to provide tech info in an easy way.