Google Question #1- Beth Ellis

What is the value that Google creates for (a) customers, and (b) advertisers? How does this value translate into higher revenues and profits?

Google creates value for customers by having a state of the art search engine, one that is rated number one for regenerating a list of web pages with the most useful ones on the top. Google realized the problem with pre-existing search engines and fixed that problem so that the internet community would be able to operate more efficiently. Since customers do not have to pay a fee to use Google, this is a very valuable resource for them.

Google creates value for advertisers in a similar fashion. Since the web site is free to customers, they handle over 300 million queries a day, and since Google found a way to put the results of a web search in an order that lists the most useful ones on top, they have come to own over 75% of the Internet search market. A company that uses Google to advertise is sure to get coverage. Google also doesn’t make sponsors pay unless a user clicks on it from a Google link, so the advertiser is sure that people are actually having their ad seen for the money being paid.

Since Google has such a unique ability to shift through information, and since they own a majority of the search engine market, a majority of companies want to advertise through the company. Google is a company that makes profits off from advertisements, so the more companies that advertise, the higher the revenues and profits will be for the company.