Google is the kind of company that a cheap guy like me can really love. They create some of the world’s best technology, then give it away for free. Using Google products can save you a lot of money, and the services they are working on now will save us money in ways that are difficult to imagine right now. Today’s article is about how the Google business works, what Google is up to next, and how it can save you money.
Google is an incredible company. It’s reputation is for being one of the most technologically advanced companies in the world. It has grown to be one of the most profitable companies in the world, and yet it is highly respected and loved by it’s customer’s in a way that most large companies struggle to achieve.
The reason Google is so highly respected is because of it’s business model. It’s business model is to make the coolest, most advanced technology in the world, then give it away for free! People love free. According to psychologists, most peoples second favorite word is “free”. (most peoples favorite word is their first name). So because Google gives everything away for free (or cheap), people love them.
Everybody knows that their search engine and email is free, but Google gives away many other services as well:
- Microsoft sells their Microsoft Office software for hundreds of dollars, but Google has built a product called Google Drive which is almost as good and lets people use it for free.
- Apple built the IPhone which runs on the IOs operating system, but it is very expensive. So Google developed the Android operating system for smart phones and licenses it to cell phone manufactures for free so that they can in turn produce smart phones that are cheap enough for most consumers to afford.
- Google decided that top of the line tablet computers were too expensive, so they created the Nexus 7. While the Nexus 7 isn’t free, it is a really good deal.
- Google decided that top of the line smart phones were too expensive, so they created the Nexus 4 smart phone. Like the Nexus 7, the Nexus 4 is a fraction of the price of it’s competitors.
- The United States lags behind many countries in the developed world when it comes to access to affordable high speed internet. Google Fiber is a program to provide cheap internet service at speeds much higher than is currently available to most consumers. Google Fiber is only available in a few markets and will likely never be available to the entire country, but it is a threat to all the monopoly cable and DSL providers across the country that if they don’t start getting consumers great high speed internet service at reasonable prices soon that Google will break their monopoly and run them out of business.
How Google makes money
So why does Google give away technology for free or cheap? How can they be so profitable when they don’t charge as much as everybody else? The answer is because Google isn’t a technology company, they are an advertising company. They make all their money by selling online ads, and all of the products they give away lead you directly to those ads.
Free online services like search, Google Drive, and Gmail lead you straight to Google’s website where you can see their ads. Providing cheap ways to get on the internet like cheaper smart phones, tablets, and better internet service make sure as many people as possible spend as much time online as possible where they are likely to be seeing all of the ads Google is selling.
The ads you see on this website for example are sold by Google. When you visit my website Google analyzes your web history along with the content of my website to determine which ads you are most likely to click on. When you click on them I earn a few cents, and Google takes a percentage of my revenue.
Now that you know how Google works, you can understand why it’s products are such a good deal. Some people hate advertising and feel like all these ads are an invasion of privacy. Other people just love a good deal and are willing put up with a little advertising to get stuff for free. If you are the type of person who is willing to see advertising in exchange for free stuff, the products Google will put out in the future will excite you. In future articles we will talk about how Google plans to revolutionize such markets as pay TV and consumer payment systems.