Welcome back! Some great comments on Apple over the last two weeks. Keep up the good work!
Yesterday, I got to try the iPad for the first time, and I must say I was impressed. Great user interface, great screen resolution, light weight, small enough to carry with you, yet large enough to use as a light laptop. As an Apple stockholder, I couldn’t be happier about Apple’s new gadget. By the way, the stock climbed above $242! Go Apple!
Now, let’s understand the business behind Google. As users of Google, it is difficult for many of us to understand Google’s business. Most users aren’t exactly Google’s customers. Most of us simply use Google for free! So, how is it that Google makes money?
If you are in my marketing class, find out what product/service Google provides to its customers and at what price.
If you are in my Intro to Business class, find out Google’s profit margin and return on equity for the last 3 years. How would you interpret these ratios?
Google has many services that are free. This includes the main one search engine. Google also gets paid for advertising they do for other companies which vary in price. Google is also starting to come out into the wireless phone business which is the nexus one to compete with apples iphone.
Return on equity over 3 yrs:2007=0.11675,2008=0.14968,2009=0.2873 And gross profit is 28.30%. I would interpet these numbers as a good thing, to me it means a profit out of every dollar.
Google has being doing great for the past three years. Base on the yahoo finance the profit margin for Google on 2009 was 27%(net income 6520448/revenue 23650563) and for 2008 it was 19% and 207 it was 25%.They had a down fall in the year 2008 but it went up in 2009.The return on equity is net income / totals owners equity in the year 2009 it was 18%(6520448/36004224) in the year 2008 is 15% and 2007 is 18%.In my opinion i think that they learn how to make profit in 2009 because in 2008 they had a done fall for a lot but they had an increase of 8% by 2009. I think in the 2010 its going to be an increase tremendously.
Google is a leader in online marketing services. Google sells advertisments. When you search for something on Google, you will notice that usually the top 1-3 links are “Sponsored Links” as well as more “Sponsored Links” off to the left. Google will sell that space at certain rates, usually charged by “click” or each time a person clicks that link. The price that is charged per click depends on many different things including what keywords are being targeted and what other companies are also targeting those keywords, ranging anywhere from $0.01-$100+.
Over the past three years, Googles Profit Margin and Return on Equity are as follows: (rounded off)
2007: PM-25% , ROE-18%
2008: PM-19% , ROE-15%
2009: PM-28% , ROE-21%
After going over these ratios and looking at some of the competitors ratios, it seems that Google is the clear leader in the industry. According to comScore, about 63.5% of all search engine traffic went through Google, and almost 90% of all growth in search volume was captured by Google. Because of such a large market share Googles profitability should continue to rise as well as its Return on Equity!
Google owns several dozen other websites, some of which have paid memberships. All of these websites have some sort of advertising and links which bring in some profit to google. On of the more profitable endeavor that Google is a part of is the partnership with Verizon in their new phone the Droid. Google gets profits from the selling of the phone as well as makes money from people purchasing Apps for this phone, which it currently has over 50,000 Apps for the phone.
Google Makes its money mainly on advertisment. the way they make money is everytime you search for something and you see an add on the left or right hand side that company pays google to show their product on that page. Google is also taking advantage of the cell phone craze. they are producing smart phones and apps for there phones.
Just google it. That all I here at my kitchen table when my children are doing homework,or anything else for that matter.Goggle makes most of their profits from advertisment and the way they do this is that everytime you look up something on there site its called a hit and that site pays Goggle for the traffic. So the more people go to Goggle the more hits are mad and with more hit come more profit. My veiw is Goggle is the best site.
Google’s profit margins have grown over the last three years from 2007 to 2009 they are : In 2007 the equity was 22.69 billion, in 2008 the equity was 28.24 billion, a growth of almost 6 billion dollars! 2009 is no different, the company continued to grow and the company’s equity in 2009 was 36.00 billion an even larger growth of 8 billion dollars. The equity of this company has to be in good order otherwise it would not continue to grow and bring investors. Thus proving that Google’s return on equity is good.
google makes money by charging the website money whenever their website is accesed through google. fo instance if you google amazon.com for whatever reason and click on amazon.com through google they recive profits for finding the website for you.in 2007 googles gross profit was 9,994,401 in 2008 13million and 2009 was not such as a jump as from 2007 -2008 at 14 million.the profit margin in 2009 was 27% and return on equity was 20.30 in 2009.
According to Yahoo finance, Google’s profit margin is currently 28.86%. In September 2009 it was 27.57%, in September 2008 it 24.29% and, in September 2007 it was 25.29%. This seems very good because the profit margin is continually increasing. Also because Google’s main competitor, Yahoo, has a current profit margin to 12.21%, which is lower than Google.
Google’s return on equity is currently 20.70%. In 2009 it was 14.67%, in 2008 it was 18.59% and, in 2007 it was 19.15%. This also seems good because the return on equity is higher than it has been in over 3 years. Also, Yahoo’s return on equity is only 6.59%, which is significantly lower than Google. Overall, I think Google is doing very well. Both the profit margin and return on equity are higher than previous years and are much higher than their main competitor.
Google is a very important and useful company in the world. website. According to Yahoo finance, Google profit margins for the past three years were 28% in 2009, 19%in 2008, and 25% in 2007. The company return on equity fore the past tree years were 21% in 2009, 15% in 2008 and 18% in 2007. As we can see Google profit and return on equity went down in 2008 but they grew again in the year 2009. Looking at the ratio i would say Google is going to grow more profit because of the importance of their service.
After doing some research on Yahoo Financing I found that Google’s profit margin is currently 28.30%. In September 2009 it was 27.57%, in September 2008 it 24.29% and, in September 2007 it was 25.29%. Those numbers clearly show that Google’s profitability has increased. Google makes money by advertising for other companies. Even though most of us use google for free, they still make a great profit out of all the advertising they do for all the various businesses kinds out there.
Google’s revenues come from its paid search and banner adviting services. According to bussiness.com the google’s profit margin was:
Twelve Months Ended Dec. 31,
Advitising revenues 2007 2008
Google web site 64% 66%
google network web site 35% 31%
Total advitising revenue 99% 97%
Licensing and other rev. 1% 3%
Revenue 100% 100%
Despite the difficulties in the economic environment, Google query growth was stong. The revenue were up in most verticals and were very successful in teir contained cost.
Google makes money for several reasons. Advertising is a huge source of income for them. According to an article on dailycommonsense.com by Ben Tremblay, everytime a visitor to the site clicks on an advertising link, Google gets a certain amount of money. They also use a bidding system to sell off advertising space. Companies bid on keywords for their advertising. Google also has no production costs.
Google’s profit margin for this year is 28.30%. The return on equity is 20.70%.
Google generates money through the usage of advertisments and companies willing to use there domain as a networking system. Google is all about networking sites and advertisments with sponsors as well. Google is the facebook of the market world you can say interms of how they network there approach. I found that since 2007 looking into there finances, this site has rose eversince 2009 where at one point there annual was 28% and now in 2010 there profits has nearly tripled.
Google is a world wide known search engine and earns billions off of advertisements. Everytime someone clicks on an advertisement, Google charges that company per click. The price they charge can range from a penny over a hundred dollars per click. Companies bid on certain keywords on the google website so their business pop up first to gain customers.
Google has come out of virtually nowhere to being one of, if not the most successful businesses in recent memory. Remembering back to Middle School, search engines were typically unheard of, and we typically used AltaVista and Yahoo, but I can still remember the day my teacher told us to go to Google, and search for information we were writing about. In a very short time, Google has become the go to search engine for virtually every internet user. Although many of their programs can be used for free, Google makes a lot of its revenue from advertising. According to the blog “Daily Common Sense”, the author states that Google makes an enormous amount of income from a program called ad sense, which hosts advertising on websites and charges per click. The author also states that Google doesn’t have a tangible product, and they essentially charge for traffic, which is what I believe has made them so successful. When you do not have to rely on a product with changing value, you can stay in business much longer. People aren’t going to stop using Google anytime soon, so I’d imagine they’ll continue to be a world power for years to come.
I actually Googled “how does Google make money” and I landed on a site called howdoesgooglemakemoney.com. According to this site google has to sources of income, One is called adwords where advertisers basically pay to get googled. They pick out a phrase that users use and bid on being able to use it and link google to their site. They also have Adsense which basically does the same thing that Amazon does. People put google ads on clients web pages and the client gets a portion of the revenue.
As of now Google is providing cell phones companies with phones. But they are about more than just phones, their thing is the internet. Google provides links to consumers in order to find the product their are looking for and if people odder something from the link they provided Google makes a percent of what the other company made.
I Read a few websites online to find out how Google makes money, but really I just wanted to confirm what I suspected. Google is a search engine that provides free services for it’s customers basically. Google doesn’t charge you to look for information on their website so how do they make money ? Google’s main income comes from Advertisement and Sponsored links. Companies pay Google to put their links up first when you search for something specific and they also pay for adds on the web page. Every time you click on an add the company for which the add is put up has to pay Google. There’s a website called dailycommonsense.com, where they also talked about a bidding system that Google uses. Where you bid for your company to come up first when people search for specific words relating to your company. Bids vary between 0.01 cents and $100. “For Highly competitive keywords for example Finance and health , it can cost a lot for a company to advertise with Google.” The NY Times says that while google is facing other problems, it’s online advertising business is “huming along nicely”.
Everybody uses google, wheter its for school, buisness or just whatever. Now how would anybody know that a free website such as google was making millions? Withouot researching or digging more about the profit margin i would of never known the statistics. For 2007 the profit margins was 25.29% then in 2008 it went down a little to 24.89 and then in 2009 27.57%. overall google is doing just fine without people actuallly knowing how they are consuming money.