Google Innovation and Growth
Essay Preview: Google Innovation and Growth
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Explain how google generates revenue and exploits innovation in digital technology to identify future revenue growth. You should also consider the risk factors for future revenue generation.
Google has launched the Google AdWords System to generate revenues from two perspective: the first perspective is to generate from businesses, for example, a small business called Anoud Jewelry in Saudi Arabia; however in order to accurately target the potential customers, the company will buy an ad on a page that it will be visited only by people who are looking for an Anoud Jewelry.
Secondly, since Google is operating on cost per basis, the advertisers will face a zero obligation, meaning that if the customer did not click on the ad, he would not pay a dime. And that considered as the Google customer perspective.
However, AdWords is not the only hit of Google’s Dual-Revenue Strategy, in a matter of a fact later on a similar and related service has formed which is AdSense.
AdSense grants the owner of a website to join Google Networks and run Google-Branded Ads which means that once he signs up the internet site to the service mentioned above, their website might run ads for other business/websites. That means companies who pay Google to run these ads indirectly profit the owners of the use AdSense.
Moreover, based on Google’s income statement almost 70% percent of their revenues is produced from AdWords while the rest is from AdSense. Hence, Google mainly generates their income from Advertisement.
Google’s distinguish success comes from that almost all of their activities accomplished without contracts! The company draws their revenues at the at-will basis. Since one of Googles annual report says, “Our advertisers can generally terminate their contracts with us at any time.”
Meanwhile, these high cash flows of income come with a positive relationship with the Risk Factors.
Ad Blocking Technology would affect Google’s outcomes especially because such technology has been existed for widely some time. Another serious risk for the business is Spammers which harm the integrity of the search outcomes.
On the Other hand, Google future levels of revenues include:
Google Video Ads: which considered as a radical concept, where Google acquire payments whenever the users click play to play the ad.
Google TV Ads: Including Ads in the Television Commercials.
Google Audio Ads: which is ads in the Radio Programs.
Google Print Ads: placing ads in printed materials such as Newspapers and Magazines.
These kinds revenues will decrees the potential risks associated with the Ad blocking technology or spammers.