Like Yahoo! and eBay before it, Google came on the scene with good tech-nology and then needed to work out a way to make money. Fortunately, that's where you come in. To put it simply, Google makes money when you do. That's the ideal, anyway. Google's revenue model is based largely on increasing the visibility and traffic of its thousands of small-business partners, streamlining their marketing costs, qualifying their leads, and helping track returns on investment. There's genius in Google's method — and fortunate timing. The typical revenue path of online media companies is lined on one side with advertising and on the other side with special services. Consider Yahoo!. While gaining a huge "eyeball share" with its Web directory and building its empire on free services to its users, Yahoo! began serving up advertisements. Although this was an old-media approach, it occurred when demand for Yahoo's ad space exceeded supply. So the company could easily charge premium prices for the privilege of placing an ad on its pages. This happy advertising era reached its height, unsurprisingly, during the greatest inflation of the Internet bubble. When the bubble was pricked, and the demand for banner ads cooled, Yahoo! started enhancing its free services (for example, Yahoo! Mail) and charging for them. This method of supplementing revenue has worked. Yahoo! is a robust media company which, by the way, owns serious search assets that might yet constitute a challenge to Google's dominance. (See the next section.) Now consider Google's contrasting situation and how it navigated its own infancy as a media company. Yahoo! surrounded its core directory with information pages, but Google concentrated all its resources in the search engine. Google paired exceptional keyword matching with cost-per-click advertising to build an advertising business that paired advertisers with customers through matched keywords.
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