How Google Makes Money

Greg P

Posted June 24, 2024underAdSenseAdvertisementAdWordsAravind SrinivasBehavioral EconomicsEconomics ExplainedEconomyEducationGOOGGoogle

Aravind Srinivas and Lex Fridman, they explain that Google earns revenue primarily through search advertising on Google AdWords. Google’s search engine, with its high daily traffic, serves as the largest real estate on the internet for advertisers to bid for keywords related to their businesses. When users click on these ads, Google charges the advertisers, with prices determined by a bidding system and high margins due to the dynamic nature of the bidding. Google benefits from all advertising on the internet, as users may discover brands through traditional means but make purchases through Google. The competition for top ad spots results in high-quality sponsored links, benefiting both users and Google

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