Saturday, December 30, 2006

How Google makes Money from Longtail!

OK Amazon and Netflix makes quite a few Millions from long tail, by selling products that are in low demand or have low sales volume but can collectively make up a volume more than the current bestsellers and blockbusters, if the store or distribution channel is large enough. Made all the more easier with the reach of the internet.

Now keyword gurus target keywords that are not competitive or "best selling", and bid for thousands or even millions of keywords that makes up the long tail of search, but that is how people make money off adsense and adwords.

The topic said, how google makes money from the long tail. Now this is a different longtail. A post on valleywag about a disgruntled small adsense user, who makes less than the minimum payout of $ 100 by google. Now, as with long tail, there must be thousands if not millions of such publishers whose money Google is holding.

OK eventually, google will payout the money to the publishers, and some google won't pay, if the publisher quits before he/she reaches 100$, but google charges advretisers as soon as the click happens, and already they have a one month Float even with big publishers. So, Google holds in its accounts Millions or perhaps Billions of unpaid dollars that will generate a huge sum of interest Income. Interesting indeed. There are companies like gift certificate operators, or food coupon operators like Ticket Accor that survives on interest income from float.

No wonder, people are predicting that google stock will touch 600$ by 2007 end.

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Anonymous Ashish Mohta said...

Yeah its true.I discovered this while talking to my dad.The main principle is to generate money out of money you earn.That what rocks.I am taking this post for my spawners.

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30/12/06 1:22 PM  
Blogger Ajitkumar Wagle said...

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30/12/06 9:40 PM  

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