This year Google has turned into a teenager, but what does this mean to us? We take a look at its meteoric rise from university research project to one of the largest corporations in the world.
Started in 1996 by Stanford University students Larry Page and Sergey Brin, Google was officially incorporated in 1998. It quickly grew to become one of the largest search engines on the web and by the end of that year they had amassed an index of around 60 million pages.
In 2000, Google launched their first version of AdWords. Rather than using banner ads, the dominant form at the time, they adopted a policy of selling unobtrusive text ads, targeted on each user’s search terms.
A year and a half later, they launched the second version of the program. Using a self-serve PPC model, Google’s new version of AdWords used click-through ratios to calculate the relevance of each ad. This was then added into the ranking algorithm, so that ads with a lower bid, but more clicks, would generate more revenue than ads with higher bids, but less clicks. The system was unlike any other around at the time and was the basis that allowed Google to expand into the giant that it is today.
From this point forward, Google went on to develop a huge range of applications and services, all of which they made available to the public for free. But why would they just give this valuable software away?
Because, simply put, the more information they know about you, the more likely they are to be able to sell you something.
Every time you use one of their services, you give them information about yourself. By keeping records of search terms, visited websites, emails and much more, Google now have enough information to build up frighteningly accurate individual profiles of millions of people across the globe.
So, the secret to Google’s success has been their ability to effectively target relevant ads to their users, there by increasing conversion rates and generating large amounts of revenue from advertisers. By using this revenue to develop high quality, free applications, they continue to increase their user base and gather more information, which in turn allows them to target their ads more effectively and generate further revenue.
With an informal corporate motto of “Don’t be evil”, Google’s business model relies heavily on brand trust. Their philosophy is to build long-term user confidence by avoiding actions that are not in the public interest, even if this means losing out on short-term gains. But how much information is too much? Should a business be allowed to have access to so much personal data? Is our information really in safe hands?
Check out this great video The Beast File: Google (‘HUNGRY BEAST’, ABC TV) from Australian news show, Hungry Beast and let us know what you think – do you embrace or despise Google, or are you somewhere in between?