Wednesday, October 14, 2009

Search profits let Google take risks in other areas, but how many will make money?

To most people, Google is a search engine. It's simple. Write what you want to find in the little box and, lo and behold, up pops what you were looking for. It's easy, it works, it's simpler to use than Yahoo's old search was (clicking on a series of categories and sub-categories) -- and it has an odd, catchy name to boot. A recipe for success -- and with the explosion of Web use, especially as broadband connections became the norm rather than the exception, success on a massive scale.

What struck me, though, is exactly how many services Google offers beyond search. We're all discussing this on Blogger -- a free Google service. YouTube, of course, is now part of the Google empire. I love Picasa - a simple and pretty powerful photo-organization-and-editing tool. When I got a Mac a few years back, it was one of the few things I missed from my PC (yes, I like it better than iPhoto); and when I got my laptop PC, it was the first thing I downloaded. Of course, it's a Google product, and it's free.

I knew Google offered lots of services besides search, but I didn't realize exactly how many -- about 150, according to the article. I found this interesting: The only service making a profit for Google right now is search. That's it. Yes, it's a huge, huge profit -- information searches are a cornerstone of the Internet -- and it's easily able to subsidize all those other ventures.

The interesting thing is exactly how many of these ventures will turn around and make money for Google. The huge ad profits from searches have let them absorb losses on their non-search ventures and allowed them to look at long-term potential rather than short-term profit. Why give away a program as good as Picasa? I'm guessing they thought getting the program onto lots of computers would open up other potential revenue streams, such as Picasa Web Albums, an online photo sharing site. Of course, there is a lot of competition in that area right now, most notably Flickr. Will Picasa ever make Google any money? I don't know. Will YouTube or Android make any money for Google? Again, I don't know, but because of that huge revenue stream from searching, Google has been able to afford to take risks.

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