It all started in 1996 as a research project by Larry Page and Sergey Brin when they were both PhD students at Stanford University in Stanford, California. It was just a search engine then. Nothing more, nothing less.
How Google became a $400 billion company
How did Google become a $400 billion company by just displaying search results?
The answer, surprisingly, is very simple. It’s just one word. “Advertising”. Yes, more than 90% of Google’s revenue comes from Online Ads. Specifically, targeted customized Ads. Now you understand why every company on the face of the earth, like Google, Facebook, Microsoft, Apple and the likes wants to track you in real-time, round the clock, and know more about you and your life. That’s the only way they can customize and target the Ads for you and there is a huge potential for revenue in that. We are talking in billions here.
From there, it’s only natural, for a company like Google, to expand their horizon and get to know more about you. After all, how much more can they know about you just by your search queries!
How can Google know more about you?
The answer, again, is surprisingly a very simple one. You voluntarily subscribe to the Google ecosystem and its services and tell everything that it needs to know, often without you even realizing it.
Not clear? Let me explain.
You drive to work every day from home. You take the same route and more or less at the same time of the day. Google keeps track of this. Let’s assume you also searched for the best coffee house near your home. Google keeps track of this too. Now, if a new coffee house opens on your route to work, Google can actually display a targeted Ad for that coffee house, in your social network, smart phone, on a chrome browser, chrome-cast and the list goes on. An average person might get all excited “Hey, there is a new coffee house on my way to work. What a coincidence, I was just searching for a nice coffee place near my home!” But now you know, it is by no means a coincidence. It was Google working behind the scenes for you making your life easier.
Building the ecosystem
Now this is just one example. You all may know that Google recently acquired a company called Nest Labs. Nest is a home automation company that manufactures sensor-driven, Wi-Fi enabled, self-learning programmable thermostats and smoke detectors.
What happens when this is integrated with Google ecosystem?
Well, let’s see. Assume you live in a hot state like Texas or Florida and you keep adjusting your thermostat to a much cooler setting. As you should know by now, Google keeps track of this. And in order to save your energy consumption, Google may automatically target you with Ads like air coolers, or better ventilation systems or heat reflecting sun shades for your windows etc. And for those who live in cooler northern states and keep adjusting your thermostats to a higher temperature, Google will target Ads for personal room heaters, a nice comforter from Martha Stewart and so on. Again, if you are an average citizen, you must be wondering how it is a coincidence that all of a sudden Ads are appearing everywhere based on your wants and needs. But those who have read this blog, knows that it is not a coincidence, but it’s Google.
If by tracking your usage and behaviour with just one device in your home Google can know so much about you, imagine if there are 10s or even 100s of devices in your home, office, car and garage how much Google can know about you and target you with customized Ads.
If Google can make 90% of its revenue from Ads coming from Search engines alone making it a $400 billion company, imagine where Google will be when the Google ecosystem is complete.
Nest, Dropcam, DeepMind and many more acquisitions are all in that direction; to build a comprehensive Google ecosystem and be an integrated part of your life.
I bet that the Google ecosystem that we are seeing now, is just the tip of the iceberg. There is much more to come in the future.
Now you all know where Google is heading, giving all its peers a run for their money.