Google is an ad firm

April 26, 2015

Are you one of those people who, for some reason, still thinks Google is anything more than an advertising company?

What do you think Google’s most business-critical product is — Search, Gmail, Google Docs, Android…?

Well, I’m sorry to tell you this, but it’s AdSense. Google themselves state it plain as day:

Google revenues
Google’s revenue for 2014 and 2015.

Yup, almost all of Google’s revenue is generated by their advertising business — ninety percent of it — and Google’s other products serve only to support and reinforce that advertising business.

But is there any problem with that? Maybe, not really, I don’t know. I think there’s some kernel of good in Google’s advertising business since it means their other products can be free of charge, some of those products even best in class, but of course all of Google’s products are made to support one another.

I think Gmail and Google Docs are great services, but their being free of charge means value must be derived elsewhere — in this case, from advertisements and research into better delivery of advertisement through data collection and machine learning, especially that research part since Google’s been generating less and less money from their advertisements since 2012.