The Google Revenue Stream: A Closer Look
At the moment, Google is only the world’s second most valuable tech company, but that doesn’t mean you shouldn’t bet on the business in the future. The company has done nothing but grow since its establishment in 1998, and today the company name has even become a verb in popular vernacular.
Google created Android, the world’s most-used Smartphone platform, and offers some of the best free services on the web, including Gmail and Gtalk. It may come as a surprise, then, that 96 percent of the $37.9 billion revenue Google earned in 2011 was generated through advertising. With this in mind, products like Android phones and Chromebooks seem like mere afterthoughts.
In spite of huge grosses, it cost Google $26.2 billion to run its company in 2011, leaving only a $9.7 billion net profit. As the company continues to grow, so too do expenses. For example, traffic acquisition costs – a major company expense – cost only $6.169 billion in 2009. In 2011, the company paid $8.811 billion for the same services.