Reading: What is the topic?

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Four readings this week (the last has great videos too!) on Google, so plenty to get the discussion rolling!

What is the topic?
What kind of approach?Summary, review
What are the key terms?
What is the argument?

What counter argumentsare identified? If not, what counterarguments can be inferred?
What examples used to tryand convince you? Persuade me
Are you convinced? If not, why to?


Battelle, J. (2005). Google 2000-2004: zero to $3 billion in five years in The Search: How Google and its Rivals Rewrote the Rules of Business and Transformed Our Culture. New York: Portfolio. In e-Reserve.

This chapter narrates Google's development of its search engine and revenue model, including AdWords and AdSense (which comprise the bulk of its earnings).

Reading: secret of Googlenomics: Date-Fueled Recipe Brews Profitability.
An easy to read account of Google's business model, with a focus on Google's ad auction system.
What is the topic?

Online auctions - Adwords; Googles secret sauce. Hal Varian chief economist for Google gave a talk at the American Economics Association in San Francisco (2007).

What kind of approach? Summary, review

Adwords is googles economic approach for search engine results for businesses who pay for search words or terms that will allow them to be found initially before competitors depending on their daily budget. $21 billion was their revenue from Adwords in 2006.

-The idea was to create an advertising system based on mathematical formula, depicting an auction like approach which could be then self-managed by its users. This in turn enabled small businesses to large organisations a chance to enter the online market in order to sell their products / services and according to budget.

What are the key terms?

Sponsored links -

Adwords - analyses every Google search to give advertisers "11 sponsored links per page" which is now an auction based platform (previously it wasn't) based on how much businesses are willing to pay for words when it was clicked on.

CPC - cost per click

Click through rate - whether your link is hit in the search results.

Fiduciary forensics - (a person to whom property or power is entrusted for the benefit of another) the propose of having an economist on board is to make efficient the information from data to relate to clients from small to large business.

Micropayment system - small charges on services.


Macro - giving aspects of itself the browser, apps and android operating system for mobile phones. Increasing

Micro - is more complicated; selling ads generates income as well as more "data about users tastes and habits... uses to predict future consumer behaviour, find ways to improve its products, and sell more ads". This is the heart and soul of Googlenomics. Determining the future on how we use business and how business is done online.

Adsense Select Auctions - businesses submitted bids on the keywords and search terms, and also a budget of how much they wanted to spend. Known as Adwords select.

Treasury auctions - didn't come back to clarify this in the paper.

Adsense - google paid ads on other websites.

Quality score - a determinant for results in users searches; ad relevance, quality of the landing page, the percentage of times users actually click on a given ad in their search results. "True, high calibre matches for what users are querying". Otherwise Google will loose money. Penalties were given to low quality landing pages.

Keyword pricing index - high cap - flowers or hotels, mid cap - varying seasonal searches, low cap - are the stuff of long tails - meaning clicks or unique groups looking for like say rockabilly events.

Google sphere - where all the data is collated before being entered into the back end of Google.

Rate of return - for every advertiser.

Datarati - (coined by Varian) all about harnessing supply and demand.

Spelunking - means one who explores caves chiefly as a hobby. So exploring algorithms purely as a hobby.
What is the argument?

Understanding how Google has grown via micropayment system, within Adwords and on building trust online through its search system and results.

"More eyeballs on the web equals lead inexorably to more ad sales for Google" (macro)

It developed the bidding and auctions for keywords online to not only have one winner but also rank 2nd and 3rd as well which proved to make the prices raise overall. This was done by independent auctions rather than a once only, so as more people were willing to pay more the rate for certain words increased.

Adwords Select was their "Two side matching market" - after their algorithm (mathematical structure) for their Adsense auctions were over viewed by Varian they focused on their auctions to increase income as they were cash poor in 2002 with 200 staff members.
Soon instead of having just sales people getting large clients to use their Adwords they were asking them to drive the market through auctions. Google did a complete turn around and went with this auction system across the board to increase more revenue whilst changing the way their sales team did business. It was a mathematical decision which businesses got to see the benefit of.
This transition to auctions across the board of Google led to Google emphasising and operating from "mathematical formulas, engineering and data mining".
Metrics are a key to the economy of Google. If they stay on top of what is working, being worked and failing they will keep google efficient and relevant.
Qing Wu; one of Varians statistician specialising in forecasts "predicts patterns of queries based on seasons, the climate, international holidays and even the time of day" this all goes back into googles backed to help "advertisers to devise more efficient campaigns". Wu calls Google "the barometer of the world" "news events shows up as spikes in their graphs"
Yahoo and other web companies have too employed economists in their mists to help grow, develop and monitor their businesses.
Eric Schmidt believes "that Google type auctions are applicable to all sorts of transactions" even though not in the immediate future.
The effectiveness of harnessing intelligent people, through their analytical use of the mathematical data that is available to make confident and bold business decisions for investments and growth, "gleaned from algorithmic spelunking". That is what will be the outcome for the datarati, as "data is ubiquitous and cheap".
What counter arguments are identified? If not, what counterarguments can be inferred?
What examples used to try and convince you? Persuade me

Initially Google was focused on licensing search technology and selling servers was their main focus. Selling ads similar to how the Yellow Pages ranked their ads, large companies (wining and dining) at the top of the page, small businesses down the side (sold as below).

Googles first ad online was sold in 2000 after posting an ad "see your ad here" which is still used today through fb and the like.
In Google's IPO they used an auction based system relative to their online operating one.
Google has 1 statistician for every 100 computer scientists. It's all about the results and keeping an eye on what keywords and auctions are working or dying to observe the keywords and clicks.
Are you convinced? If not, why to?


Levy, S. (2009, May 22). Secret of Googlenomics: Data-Fueled Recipe Brews Profitability. Wired, 17(06). Available:

Reading: Beyond Google and evil: How policy makers, journalists and consumers should talk differently about Google and privacy.


What is the topic?

Analyzing Google privacy worldview ,The privacy rhetoric of Google is questioned by privacy makers,journalists and consumers as they believe Google is ''violating'' the company corporate motto ''you can make money without doing evil'' and making it difficult for the users to stay up to date with their policy practices as Google constantly changes them.

What kind of approach? Summary, review  

The essay is characterizing Google's information privacy worldview and how the company handles the ''tension' between the benefits of innovative new services and the desire of individuals to control the way in which personal information is used. This is done by reviewing hundreds of articles where Google speaks about privacy in order to provide meaning of the company's privacy rhetoric. In many articles Google claims ''Safety is important'', ''Trust is important''. This approach reassures consumers even though they are not familiar with data practices and how their personal information is shared and disseminated on the web.

What are the key terms? 

Privacy rhetoric- Google is characterized as ''evil'' by some due to its advertising revolution and behavior tracking

Google privacy talk- Companies have a different conception about privacy then the consumers. The trade offs and privacy agreements should be reevaluated in order for consumers to be able to make a clean break with Google if they wish o do so.

What is the argument? 

The article concludes four recommendations in order to reform Google privacy rhetoric.

The argument of this article is that Google privacy rhetoric ''lacks substance'' and that the individuals are given the impression that the privacy issues are solved while actually unaddressed. Consumers equate the company's good attributes like a quality of the product and a service with policy practices. Google knows this customer behavior so it adopted ''Privacy is important' talk.

Consumers think that privacy prohibit Web sites from selling personal information therefore they see  Google as a guarantee of best practices because they say that ''Privacy is important'' although this might not be entirely true. For that reason the article suggests that the privacy practices should be reevaluated.

As a search engine Google was the first to provide a search results free of advertisers interests, pop ups and other flashy advertising. The Google founders thought that putting users interest was more important then the advertisers interests. In 1990's before Google was invented, searching the web was frustrating because it was difficult to find content free from commercial promotions.

The articles argues that the Google's concept of ''evil'' has been decontextualized by many users and that the ''evil talk'' about Google privacy hides the consumers benefits from Google advertising model.

As reported by Saul Hansell: ''Because Google’s ad–buying clients pay for ads only when users click on them, they can precisely measure their effectiveness — and are willing to pay more for ads that really sell their products''.

Google's beneficial advertising model and services are obscured with the ''evil'' talks that the journalist reveal.

What counter arguments are identified?  If not, what counter arguments can be inferred? 

Google privacy is represented with vague talks and vague commitments to privacy and user trust leaving consumers to innocently participate in Google's Privacy Worldview.

''Such non–committal talk does not inform the public about the company’s values and decision–making processes. It leaves many gaps and unanswered questions, in hopes that consumers’ optimism bias and naiveté will fill them with their own values'' (Hoofnagle, 2009, pp.15).

Google should enable meaningful tradeoffs and allow its users to take a choice and revoke it later if they wish. Users should have a possibility of switching their personal data from Google to another provider.

Google could use its privacy practices to limit the fraud and potential harm of targeted advertising.

The purpose of this article was to assist journalist, policy makers and consumers in dialogue with Google's privacy practices. An author suggest that journalists and policy makers should concentrate more on debate about company's actions, inactions and the way the policy is subordinated to other values.

Hoofnagle, C. (2009). Beyond Google and evil: How policy makers, journalists and consumers should talk differently about Google and privacy.First Monday, 14(4). Available:

From a more academic perspective, this journal article argues that the good/evil debate that dominates commentary and analyses of Google is actually obscuring real progress in terms of Google's handing of privacy concerns. What does Hoofnagle suggest we should be looking at?

Reading: The Googlization of Everything.
What is the topic?

How goggle is disrupting the way business online is evolving and occurring.

What kind of approach?Summary, review

"Google isn't just a search engine but a camouflaged political persuader" in reference to Google maps showing the mountain range Arunachal Pradesh being in both China and India territory, a bone of contention in both counties. Shifting national boundaries to keep with political correctness of both countries.
Due to its mass collection of data, Google is becoming "the new opium of people" we use it, share our personal selves with it without concern of the power it is gaining.
Google is competing in the bookstore department but is having copyright issues that it is battling in court.
Tech crunch TV interview;

Arguing in his book to provoke people to think more clearly about how we use Google in our lives.

Question it about what it provides and hides. It's value is what it links us to and what it hides in our searches. Algorithm is the product of value decisions by the programmers. Google favours the recent over the classic, local over global, personal over universal. It all works beautiful for shopping, it's main income is ads and auctioning those ads, it's aimed for shopping.
Based on your previous history searches it conditions our results.

Compared Google to Caesar. The web pre Google was confusing and unorganised, he refers that the way Google took control in a vacuum. The web is now governed via search engines, the bigger one is Google. Becoming a monopolist in search, Western Europe is 90%, America is at 65%.

What are the key terms?

Google Gadfly -

What is the argument?

The power Google is gaining is something we should be concerned about due to the power it is gaining. Becoming more critical on how we use google, privacy, clicking the second page, using different search engines and see what we get.

"Google hides the noise and brings us harmony"
Information ecosystem through other search engines to create a diverse as possible information source and allows us to stumble upon information that isn't made nice for us and is set to cater for our interest, age and sex.
Google runs its advising business is run so well, it's a leading power in economy online through advertisement.
Google is selling us as consumers, our habits. Becoming intimate to us through our online activities.
What counter arguments are identified? If not, what counterarguments can be inferred?

Changing how we use search engines online so the information gathered on us is from our awareness.

What examples used to try and convince you? Persuade me

Google tracks what we do and then positions ads that appeal to us.

Anti trust investigations going on in both Europe and America. It is up to regulators and of they can investigate it efficiently and will it reveal trade secrets, which is not what is wanted as it could be detrimental to their ongoing success or existence as a business.

Due to Google privilege it's own products over others, even though they promote that it doesn't do that through its automatic algorithm.

Searches are not repeatable, as the algorithm is always changing.
Are you convinced? If not, why to?

Even though he is throwing out these questions he doesn't want Google to go away. It's like better the devil you know.


Vaidhyanathan, S. (2011). The Googlization of Everything. Available: This blog accompanies the book of the same name. Use the site to find recent news or critical perspectives on different aspects of Google's business practices.

It's up to you AS A TEAM how you tackle the readings & activities. Do you each read all the articles or divide them up amongst you, and summarise for your team mates? My advice is: do what works best for your team.

Here are the activities to go with the readings:

  1. You have a thriving blog that is generating decent traffic. Visit Google's Business Solutions site and find out how you can monetise your blogging using Google.

The Adsense program through Google allows you as a blogger to simply add code and then Google will assess the content of your page to be able to position relative ads to your content. You can do this for both your mobile website or computer based website. Adding a custom search engine to your site and then generating an income when people click on the results from that search. Woohoo. Google Adsense pays out income from click throughs on ads from your site on a monthly basis provided you meet the minimum $100 turnover of income, for lower traffic sites it may take a while to get a payment. (Grahams, ) To reduce the conflict of design of ads and the overall design of the blog tweaking not only from Google but the customisation of their ads on my site is possible to reduce the impact of the ads. Googles Adsense has an analytics and metric report that allows insight into the demographics and locations of people who use ads on my blog.

Retrieved from;

When you have video embedded in your blogs you can also generate income from that medium.

  1. Work out the ways Google generates revenue for itself and find out the top earners for Google

Ways Google generates revenue;

Here are the top 20 industries that spent the most on Google advertising last year. (2011)

  1. Finance & Insurance

  2. Retailers & General Merchandise

  3. Travel & Tourism

  4. Jobs & Education

  5. Home & Garden

  6. Vehicles

  7. Computers & Consumer Electronics

  8. Internet & Telecom

  9. Business & Industrial

  10. Occasions & Gifts

  11. News, Media & Publications

  12. Apparel & Jewelry

  13. Real Estate

  14. Health (excluding Heath Insurance)

  15. Law & Government

  16. Hobbies & Leisure

  17. Family & Community

  18. Dining & Nightlife

  19. Beauty & Personal Care

  20. Arts & Entertainment

These industries accounted for 70% of Google’s income in 2011. Can’t find anything for 2012.

Kim, L., 2012. Frequently Asked Questions about the Top Google Advertisers Infographic. The Word Stream Blog. Retrieved from;

Google earns most of it’s $8billion revenue from advertising, excluding Motorola, hence it’s focus on mobile advertising which is where online revenue is going as we own more mobile devices than PC’s or Macs.
This is why it made absolute common sense for Google to acquire Waz to foster continuous growth in this market. Google has transformed YouTube One Channel so the programmes are displayed continuously across mobile devices.
Also it’s great income is through Google Apps, Mobile Content, Mobile Devices.
Zeevi, D., 2013. How does Google Make Money from Mobile, Infographic. (March) Retrieved from;
Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 20% over the first quarter of 2012 and increased approximately 3% over the fourth quarter of 2012.

Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 4% over the first quarter of 2012 and decreased approximately 4% over the fourth quarter of 2012.

TAC – Traffic acquisition costs, the portion of revenues shared with Google’s partners, increased to $2.96 billion in the first quarter of 2013, compared to $2.51 billion in the first quarter of 2012. TAC as a percentage of advertising revenues was 25% in the first quarter of 2013, compared to 25% in the first quarter of 2012.

The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.28 billion in the first quarter of 2013. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $680 million in the first quarter of 2013.

Motorola Mobile Revenues (hardware and other) – Motorola Mobile revenues were $1.02 billion, or 7% of consolidated revenues in the first quarter of 2013.

Other Cost of Revenues – Other cost of revenues, which is comprised primarily of manufacturing and inventory-related costs, data center operational expenses, amortization of intangible assets, and content acquisition costs, increased to $2.98 billion, or 21% of revenues, in the first quarter of 2013, compared to $1.28 billion, or 12% of revenues, in the first quarter of 2012.

Operating Expenses – Operating expenses, other than cost of revenues, were $4.55 billion in the first quarter of 2013, or 33% of revenues, compared to $3.47 billion in the first quarter of 2012, or 33% of revenues.

Amortization Expenses – Amortization expenses of acquisition-related intangible assets were $315 million for the first quarter of 2013.  Of the $315 million, $153 million was as a result of the acquisition of Motorola, of which $116 million was allocated to Google and $37 million was allocated to Motorola Mobile.

Stock-Based Compensation (SBC) – In the first quarter of 2013, the total charge related to SBC was $697 million, compared to $556 million in the first quarter of 2012. We currently estimate SBC charges for grants to employees prior to March 31, 2013 to be approximately $2.7 billion for 2013. This estimate does not include expenses to be recognized related to employee stock awards that are granted after March 31, 2013 or non-employee stock awards that have been or may be granted.

Operating Income – On a consolidated basis, GAAP operating income in the first quarter of 2013 was $3.48 billion, or 25% of revenues. This compares to GAAP operating income of $3.39 billion, or 32% of revenues, in the first quarter of 2012. Non-GAAP operating income in the first quarter of 2013 was $4.22 billion, or 30% of revenues. This compares to non-GAAP operating income of $3.94 billion, or 37% of revenues, in the first quarter of 2012.

  • Google Operating Income – GAAP operating income for Google was $3.75 billion, or 29% of Google revenues, in the first quarter of 2013. This compares to GAAP operating income of  $3.39 billion, or 32% of Google revenues, in the first quarter of 2012. Non-GAAP operating income in the first quarter of 2013 was $4.40 billion, or 34% of Google revenues. This compares to non-GAAP operating income of $3.94 billion in the first quarter of 2012, or 37% of Google revenues.

  • Motorola Mobile Operating Loss – GAAP operating loss for Motorola Mobile was $271 million, or -27% of Motorola Mobile revenues in the first quarter of 2013. Non-GAAP operating loss for Motorola Mobile in the first quarter of 2013 was $179 million, or -18% of Motorola Mobile revenues.

Interest and Other Income, Net – Interest and other income, net, was $134 million in the first quarter of 2013, compared to $156 million in the first quarter of 2012.

Income Taxes – Our effective tax rate was 8% for the first quarter of 2013.

Net Income – GAAP net income in the first quarter of 2013 was $3.35 billion, compared to $2.89 billion in the first quarter of 2012. Non-GAAP net income was $3.90 billion in the first quarter of 2013, compared to $3.33 billion in the first quarter of 2012. GAAP EPS in the first quarter of 2013 was $9.94 on 337 million diluted shares outstanding, compared to $8.75 in the first quarter of 2012 on 330 million diluted shares outstanding. Non-GAAP EPS in the first quarter of 2013 was $11.58, compared to $10.08 in the first quarter of 2012.

Cash Flow and Capital Expenditures – Net cash provided by operating activities in the first quarter of 2013 totaled $3.63 billion, compared to $3.69 billion in the first quarter of 2012. In the first quarter of 2013, capital expenditures were $1.2 billion, the majority of which was for production equipment, data center construction and facilities-related purchases. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the first quarter of 2013, free cash flow was $2.43 billion.

We expect to continue to make significant capital expenditures.

A reconciliation of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, is included at the end of this release.

Cash – As of March 31, 2013, cash, cash equivalents, and marketable securities were $50.1 billion.

Headcount – On a worldwide basis, we employed 53,891 full-time employees (38,739 in Google and 9,982 in Motorola Mobile and 5,170 in Motorola Home) as of March 31, 2013, compared to 53,861 full-time employees as of December 31, 2012.

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original information page;

Who are the top earners for Google;

Person of Interest



Shawn Hogan

Alexa Rank 286; $500k pm

Markus Frin

Alexa rank 274; $300k pm

Kevin Rose

Alexa rank 185; $250k pm

Michael Arrington

Alexa rank 6; $240k pm

Nick Halstead

Alexa rank 739; $225k pm

Jeremy Schoemaker

Alexa rank 8508; $140k pm

Jason Calacanis

Alexa rank; 47122; $120k pm

David Miles Jr. & Kate Leonard

Alexa rank 296991; $85k

Panjak Agarwal

Alexa rank 2123; $145k

Amit Agarwal

Alexa rank 1562; $100k

AQ Forums.

  1. Hardly a week goes by without some news about Google. Discuss the latest news about Google, in terms of both business and cultural impact. What do you think of Google's influence?

Google App Engine; Cloud computing is the big buzz word and it is apt that Google is staying ahead of the curve in this department. It has security issues that aren’t been clearly addressed but it is something that people are looking into to make using the web and sharing files a lot easier and efficient.
Internet Balloon Project is Google’s way of being philanthropic as well addressing a well known issue of classed society in the have and have nots of not only access to technology devices but the internet.
Google is harnessing the long tail of the internet by getting into laptops with Acer Chromebook retail $199 which is a laptop sold with all the Google software/platforms inbuilt in it. Spreading its network through technology, so a tangible product inbuilt with their digital software.
A good example of Google balancing the war on good and evil in it’s persona. In the past it saw porn as being ok, it did establish the first safe online credit card processing so it may get some wide births there. Facebook has weird rules on what is appropriate and not. But they are doing this move not only to remove this content but also id the computers that are submitting and sharing this content. Google is definitely working on it’s good side. (McHugh)
Although as this article outlines, it wasn’t all on Google’s altruistic side to get this ball rolling as there was pressure within the UK for Google to take a more proactive stance against this kind of content being shared and linked to through Googles search engine. Google also donated $2million to child safety organisations, which could make up for it’s lack of paying adequate tax in that country.
Google’s lastest tech acquisition; Waze is Google’s ultimate goal of making travel through routes easier to advise when reporting on traffic accidents or events that are happening as they happen in every location. This software was designed by an Israeli and Palo Alto developer in 2007. There was a bidding war between Yahoo, Facebook and Google for this, but they sealed it by offering $300k above the others. This allows for ‘real time data and feedback on route’ and is the latest outcome of the ‘map wars’ that is going on through the big tech companies. Being a mobile software it is also appealing to this large aspect of the market they are all vying for in making life easier while being mobile. Apple didn’t place a bid as it’s map software is still no where near operational so they may have been too far behind the game to utilise efficiently.

Israel is definitely on the big guys horizon as it is known for releasing some worthy technology development start-ups.

This is an example of Google ‘making an acquisition for its users’ something quite common in the race to stay viable in the social networks. Waz has also been looking into making driving social by allowing people to see how their friends are traveling to a mutual destination.
Waz also sees itself as a data company, not so much a map company the overall usability of this software and the fact that it will change routes to save the driver time will make its overall use more popular on top of Google Map. It will also advise on how much time was saved as the route is changed as you go. Awesome!!!
Within this app advertising, Google’s biggest game plan, can be positioned as the driver gets to the area or even on route to advise of places to see, things to do and sales. Local, mobile advertising is set to rocket in the US in the next few years.
This article reviews that Facebook and Apple should have fought harder to keep this technology out of Google’s hands as it makes Google Maps the ideal marketing and navigation tool.
Penguin 2.0; focuses on good content that works within the boundary of SEO without over quoting key words, and not providing relevant services or content for the traffic they are looking to garner with their knowledge of how to work Google’s algorithm. Branding and that contained within content is King.
Ranking through location and keywords that are crucial to local businesses ranking in searches. “applying the real world to the online world’ is refined with listing NAP, to allow people who are searching local find what they need local. Thus content, videos, pdf’s, articles, all optimised SEO so that your online branding is done to captialise on this algorithm.
It’s not so much about back links, but more about relative content.

NAP – name, address, phone numbers to be at the top of web pages so the content is easily found by crawlers.

‘branding citations for SEO’ this is seen to make it easier for inbound marketing to design content that will be relative to creating and building the right audience for any business.

Finally, and on a less controversial note, you might want to think about how Google integrates its various services. What are the threads connecting these services together?


Grahams, A., ???? Pros and Cons of Google Adsense. Opposing Views, Science. Demand Media. Retrieved from;
No Authors name. 2013. Top 10 Google Adsense Earners of 2012. AQ Forums. retrieved from;
Levy, S. (2009, May 22). Secret of Googlenomics: Data-Fueled Recipe Brews Profitability. Wired, 17(06). Available:
McHugh, J. (2003). Google Vs. Evil. Wired. 10 (1). Available:
code to insert it into our wiki page.

google revenue
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