Google is drastically under-monetized.

[Curtis2011]

For the owner of about 70-80% of all search engine traffic, Google is way under monetized.

They make buttloads from their Adsense ads, but as most internet-preneurs know, Adsense is about as inefficient as it gets when you're talking about making money online.


I wonder if Google realizes that if they made physical products, they would have free advertising right in front of 80% of the online world. If they manufactured their own products and entered the e-commerce sector (selling physical products online), they could bring in literally billions more in revenue. And it would almost be for free, since they already own the marketing channels. All they would have to do is stick 1 little ad for their own products at the top of related search engine results.

It's too bad (for Google) that they are a technology company, and are probably too far removed from manufacturing to even realize its potential.

[James81]

I LIKE the fact that Google hasn't sold out and stuffed their homepage with ads. That's part of the beauty of why Google is so frikin awesome because it loads quickly and is very basic. That's what made them successful in the first place, and I think they realize that.

Yahoo, on the other hand, is just bloated and sketchy.

[Dharma]

Way back when google (search engine) was in it's alpha and beta stages, they would survey users as to what type of ads they wanted, if any. I was a user of google from the beginning and my thoughts, like many others, was to keep the interface clean, without clutter of flashy ads.

They have stuck with simple the text ads in the search results from the beginning and I think that's what makes me keep using it. They focus on search results, not selling me stuff. If Google turned into Amazon.com I would probably find a new search engine.

[James81]

Originally Posted by Dharma

If Google turned into Amazon.com I would probably find a new search engine.

Not only that, but I'd make a mad scramble to create something like Google has now, so that when people get annoyed and start looking for search engines, they'd come to mine.

[ssandra]

Originally Posted by Curtis2011

It's too bad (for Google) that they are a technology company, and are probably too far removed from manufacturing to even realize its potential.

You never know:

Lots and Lots of Google Phone Rumors: HTC, Android, and even Yahoo in the mix

[spirit4711]

Originally Posted by Curtis2011

...
It's too bad (for Google) that they are a technology company, and are probably too far removed from manufacturing to even realize its potential.

I don't think it's bad at all! Look what they created so far, and how much it's worth!

Plus, if they did what you proposed they would probably lose lots of search engine users as they would kind of become the Microsoft of search and that is what most people don't want. They want quick and reliable searches, not 'google prefers google businesses' search results.

They're very smart people at Google!

[mikethedrummer44]

I know an even more inefficient way to make money online: Site Build It!

...Sorry. Bad joke.

[runningbird]

Google DOES have their own products they sell: Which Google Products Make Money?
(seamless monetization - you didn't even notice)
It's much more efficient to use their own programmers and stay true to their trade rather than go outsource some manufacturing and logistics for shipping products all over the world.

On an aside, I don't understand why anyone uses yahoo or msn. Are they crazy?

[Marth]

just look at the youtube disaster which they bought out. Losing millions on servers and can't figure out monetization* strategies that really work

[Curtis2011]

Originally Posted by Marth

just look at the youtube disaster which they bought out. Losing millions on servers and can't figure out monetization* strategies that really work

Lol true that. Right now Youtube is one giant-ass liability. Although it does come back to the idea that I originally posted... under-monetization for the # of users that come to it every day.

Maybe Youtube could be monetized better by making its users pay a monthly fee (ie $5-$10 per month) to "login" to youtube. In return, youtube could remove all ads and make the site much more community-oriented and add more functionality to it (easier ways to share videos with friends, etc.) Also a very nice feature would be for Google to purchase the licensing rights to all material on Youtube, instead of removing music or material that violates copyright restrictions. If Youtube actually was profitable, Google could afford to do this for it, and I think it would help keep the users around and paying.

[runningbird]

Millions of users have made videos with the sole intention of having them accessible to all for free. They would be very upset. It would also obstruct some great things like the freedom of Iranians to share their true situation with the world.

[Piercetheveil]

It is inaccurate to say that google is "under-monetized."

To evaluate that you would have to have insider knowledge that the majority of us do not have.

I can say that I have had strategies that appeared to leave money sitting on the table before. However, sometimes short term money is not the over all strategy.

[hawkal]

Would it be legal? I mean isn't Google creating its own products to promote on it's own platform a bit like Microsoft shipping IE with Windows, which in Europe they've had to change for Windows 7 because they lost the case.

[ar81]

If I was Google CEO in a fictional world I'd be trying to figure out how humans behave, and then sell some data to people in the advertising industry intead of trying to advertise in the website. People pay for information.

It is data mining without installing spyware in people's computers.

This is how I imagine their business.

[Curtis2011]

Originally Posted by hawkal

Would it be legal? I mean isn't Google creating its own products to promote on it's own platform a bit like Microsoft shipping IE with Windows, which in Europe they've had to change for Windows 7 because they lost the case.

I don't think there will ever be an anti-monopoly ruling against Google, seeing as how it is just a search engine and there are literally thousands of other search engines that anyone can use at any other time.

I suspect if there were dozens of operating system-making companies that rivaled Microsoft, then Microsoft would be allowed to do as it pleased because it wouldn't be "abusing" a monopoly position.

[SatvikBeri]

Originally Posted by ar81

If I was Google CEO in a fictional world I'd be trying to figure out how humans behave, and then sell some data to people in the advertising industry intead of trying to advertise in the website. People pay for information.

It is data mining without installing spyware in people's computers.

This is how I imagine their business.

Google is a major player in the online advertising industry. One of their major strengths is that they have and use massive amounts of information about people. Why would they want to help their competitors?

[SomeRandomGuy]

I have to agree with what others have said. If Good decided to go that route it might make them more money but would cause them to lose users and respect.

[Andrew Brunelle]

If google made physical products, then it would have to take those items from the Earth. That would eventually make them unsustainable. Not only that, the reason Google is so successful is because it is mostly paperless and has very few ads on it, which is always a plus in my book. I'm tired of looking at advertisements everywhere I go.

So what if Google is undermonetized? Is the point of life to build up as much money as possible so that you can enjoy a life of extreme excess and meaningless possessions? If the CEOs of Google made an extra billion dollars a year, or even 40 billion more a year, would it really enhance their lives that much more? I say that Google should stay the way it is and not to change a thing.

[cacheborn]

I don't agree with the basic premise that Google is under-monetized. Online advertising is one of the most profitable things you could do and they own most of the market.

The guys at google are very smart. It becomes clear if you see how they have gradually progressed. Starting from search engine, gmail, blogger, youtube, chrome browser, chrome OS. And at each step they created value for users without charging them directly. They wanted to make money but they were not greedy. Most of the main page of google is still blank white space, so pleasing to the eye. Compare with Yahoo, where you have to find the search box amongst all those crowded ads.

[Curtis2011]

I am not saying add more ads to Google or add spam to it.

I am saying, instead of having the top 1 slot of an Adsense ad be an ad for a product from a different company, if it was an ad for a Google-made product, then Google could increase their revenue by millions and eventually billions.

My suggestion would not change Google at all. It would merely place an ad for a Google-manufactured product above the ads for non-Google-manufactured products.

The only problem is that Google is not at all experienced with physical product markets. Only software and technology. If they were willing to expand in the direction of manufacturing/shipping, they could make billions with very low marketing expenses.

[SatvikBeri]

Originally Posted by Curtis2011

I am not saying add more ads to Google or add spam to it.

I am saying, instead of having the top 1 slot of an Adsense ad be an ad for a product from a different company, if it was an ad for a Google-made product, then Google could increase their revenue by millions and eventually billions.

My suggestion would not change Google at all. It would merely place an ad for a Google-manufactured product above the ads for non-Google-manufactured products.

The only problem is that Google is not at all experienced with physical product markets. Only software and technology. If they were willing to expand in the direction of manufacturing/shipping, they could make billions with very low marketing expenses.

Curtis,

You're a little off.

Keep in mind that when you talk about maximizing profit at a company, the real goal is to maximize profit for the owners. A company might have higher end profits by soliciting venture capital and expanding-but this doesn't mean that their owners will benefit.

One major consideration in Business is not just maximizing profit, but maximizing profit margins and return on investment. As a publicly owned company, to make money for its owners, Google's goal is to achieve the highest possible ROI with the cash they already have. Not to mention that Google has extremely high profit margins, since they have very few costs. On the other hand, profit margins for manufacturing companies are extremely low on average.

You should also know that the top ad spot is enormously valuable. Do you realize that Google would get a lot less revenue from advertisers if they kept the top spot for themselves?

So in effect, manufacturing and marketing their own products would be trading in a high ROI channel for a low ROI channel.

[cacheborn]

Originally Posted by Curtis2011

I wonder if Google realizes that if they made physical products, they would have free advertising right in front of 80% of the online world. If they manufactured their own products and entered the e-commerce sector (selling physical products online), they could bring in literally billions more in revenue. And it would almost be for free, since they already own the marketing channels. All they would have to do is stick 1 little ad for their own products at the top of related search engine results.

It's too bad (for Google) that they are a technology company, and are probably too far removed from manufacturing to even realize its potential.

Looks like you manifested it buddy.

Hardware for Gmail: The 'Gboard' keyboard

[Curtis2011]

Originally Posted by cacheborn

Looks like you manifested it buddy.

Hardware for Gmail: The 'Gboard' keyboard

Score one for the C-man.

[cacheborn]

Originally Posted by Curtis2011

Score one for the C-man.

Please chose your further intentions carefully.

[Mikahcho]

Meh, I think google have done an awesome job to get where they are today.

It's the most simplistic search engine out there, that I've seen. Even my dad can use it. That's saying something.

[James81]

Originally Posted by Curtis2011

The only problem is that Google is not at all experienced with physical product markets. Only software and technology. If they were willing to expand in the direction of manufacturing/shipping, they could make billions with very low marketing expenses.

Yeah, but that's what they are good at.

I'm an Engineer. Based on your logic, I am drastically undermonetizing myself by using CADD to create my drawings. Think of all the money I could make if I were to create my own CADD system and sell it.

Except I didn't go to school to make programs to design stuff with. I went to school to actually design stuff. I am not qualified to make a CADD system and I'm better off not even fooling with it because in order to start making physical products, I'd have to divert some of my resources into developing that area of my expertise and that wouldn't be monetarily feasible.

It's the same thing with Google.

[spirit4711]

Originally Posted by Curtis2011

...
Although it does come back to the idea that I originally posted... under-monetization for the # of users that come to it every day.
...

Under-monetization based on what norms? What would be a good level (per user?) of monetization?

[Piercetheveil]

I play both on the publisher and advert side. So, I get to see what most users or one siders don't as I have to pay attention to the whole industry.

Here is a start (and its just the beginning of my docs on things that G is doing)

Google's Mortgage Comparison Tool; Bank Rankings; GMAC, US Bank, FHA Updates

Monies.

[The Rock]

I agree, Google is really undermonetized. Right now, most of the services they offer don't make any money directly. GMail only makes money from AdWords. Google Reader doesn't make a cent at all! All of their services, especially YouTube, could be making a lot of money directly but right now they only make money from AdWords ads displayed in them...

Heck, who said they have to sell, stock, and ship physical products? They can easily register an an affiliate for popular products and then do what you say in your post.

Even selling a sponsorship spot on their homepage would raise a ton of money.

Thing is, Google will certainly expand beyond AdWords as a major money maker in the future. What people don't get here is that they really only care about the share holders, not the users, not the webmasters.