If You Love Google, You Will Love This

[mjtaylor]

Google ad revenues, according to an article in today's NY Times article,
is growing "twice as fast as the overall online advertising market."

FWIW, MJ

[kgun]

Yes,

1. But how firm are their rules (like ad % etc.) Can it be changed with a stroke of the pen? That may be very important for companies with many employees, operating clean and using Google Ad's as a main source of revenue.
2. How consitent are profit sharing across markets?
3. Are there any discriminations?
4. Are there unwritten rules?
5. What about sites using competing ad's from eg. providers like CJ, LS, TradeDoubler, Yahoo, MS etc? Google is an American company and American authorities (as economists like me) don't like monopolies. Note: Google is not a monopoly, but very efficiently run company, IMO. It is extremely difficult to beat their business model.
6. Google reads this, so my moralism for today is. "Be careful Google. You are a young company."

<cite>
"In recent weeks, Google stepped up its plans to sell ads on cellphones, and the company is expected to announce an operating system for mobile phones soon. Google also introduced two efforts intended to cash in on YouTube’s popularity. In September, it showed a type of online video ad that is overlaid on YouTube clips. This month it said it would use its advertising network to distribute YouTube clips that are surrounded with ads".
</cite>

P.S. There is a huge difference between a monopoly and a company with a monopolistic position in their market like Coca Cola. One investing criteria for one of the world's best investors, Warren Buffett is according to what I have read that he looks for companies with a monopolistic postion in their industry. Another is that he don't invest in companies that he does not understand. How easy is it to understand Google?

[activeco]

Originally Posted by kgun

It is extremely difficult to beat their business model.

They neither have a special business model nor revolutionary products. All they have is the 'trust' factor, something the market desperately needed for years.
In fact their business model in advertising area is terrible, with almost all unknown variables, where it is impossible to make any future projections. It works simply because... it makes money to all parties in the game.

[kgun]

Google Revealed: The IT Strategy That Makes It Work

May be that article may modify your opinion.

[activeco]

Kgun, it is very well known among insiders that Google's technical solutions are superb in the industry. In fact they hold a number of nice patents in the area of coping with extreme traffic in a timely manner and similar stuff.

But it is not what average Joe knows about Google, niether it makes their business model special. They have been constantly faced with various technical challenges and they solve it very well.

The Google's BUSINESS is advertising, which provides them with more than 90% of their sales and profits.
And how their advertising model works?

For advertisers:
- You have no guarantee of any kind
- You don't know how much a click on your ad will actually cost
- Even if you spend the most money, you have no guarantee to be in front of your competition
- The very same campaign could produce very different results, based on unknown factors
- It is almost impossible to make decent projections for the future

For publishers in the Content Network:
- You have no guarantee of any kind
- You don't know how much you earn with a click on your site
- The (quality) growth of your traffic doesn't necessarily translate into more Adsense earnings
- The very same Adsense ads/data could produce very different results, based on unknown factors
- It is almost impossible to make decent projections for the future

There is one legal statement that we miss here and it comes rightly from the financial markets trading or gambling: "Past performance is no guarantee of future results".

So, if someone comes to you with a similar business proposal, how would you react to it?
Maybe positive if it is a member of your closest family or a trusted friend. But from a stock market listed company?
It's only trust they have and I don't say it's nothing. I still appreciate their values.