Now that Google has released earnings for all of 2008, I decided to update my "Where does Google's revenue come from?" pie chart. Back in July, I noticed that a massive percentage of Google's revenue comes from advertising. 98 percent, at the time.
Now, Google's money from advertising accounts for a mere 97% of Google's revenues, with just 3 percent coming from "licensing and other revenues." In 2007, Google made 99% of its revenue from advertising.
Ask your friends what business they think Google is in. Likely "search" is at the top of the list. This is incorrect. Even with Android and many other high-profile projects, Google is an advertising company.
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It's not an advertising company, it's a media company
They are a publisher. They publisher little snippets of other people's websites and sell ads around it. Great model. A lot like the news business.
Google is a software applications developer, and these applications are delivered over the internet, mobile, etc. What makes google different from a pure media company is that advertising space is sold not just on its search results page. With Adsense, contextual ads also appear on partner websites. I dont know what the revenue contribution of Adsense is vis a vis Adwords, but nevertheless it makes Google different from a media company or a publisher. So even if Google shuts down its search engine (the "media" side of its business), as long as people advertise on websites, it would still have a revenue stream.
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