The Google Business Model

Google's multi-sided market

A two-sided market is made up of a platform and two user groups.
If the platform wants to be successful, it need to appeal to both
groups that are necessary to its economic activity. One of the
main characteristic of these markets is a service become more
valuable as more people are using it.

Setting up a pricing system

In order to maximize its profit, a company has to choose the right
price for each group. Setting a lower price and giving up some
value on one side may lead to more clients on this side, which in
turn would attract more clients on the other side and more than
make up for the difference of profit.

Google's long tail of advertisers

The ad system's success is based on its ability to broaden significantly
the market of potential advertisers. In the beginning, the advertiser
side of Google's two-sided market was mainly made up of business
that usually did not advertise on traditional media. Small business
find the most appeal in these ads. They usually cannot afford any
other kind of advertisement to fit their need perfectly.

Google's search for new ad supports

Despite the success of its search engine, Google's monetization
was limited to a unique entry point. Its winning ad system coupled
with a wide range of advertisers gave Google the opportunity to
look for new advertising supports.

Google's video strategy

Google is largely dominating the online video market. They focused
on creating a wide network of contributors and on opening their
content to all possible sources of audience. They are now facing
the difficulty of attracting advertisers and promoting an efficient
revenue model on a new market. Part of the large strategy of
content control and audience domination are:

a) new medium, new media
b) organizing the world's information
c) accessibility

Google's mobile strategy

The search engine mobile strategy is confronted to the existence
of a value-chain structured around strong players, from manufacturers
to mobile carriers. Google's energy is focused on recreating an open
ecosystem in which they could reproduce their web mobile. Still,
they are inverting in the hypothesis of a significant mobile
advertising market.