Battelle Chp 5-7

January 31, 2008

The most well known model of business for internet advertisements did not originate with Google!? Really? Google is everything, has everything. How could that be?

Battelle tells all about the history of how Google landed what eventually became the largest internet enterprise that we know today through the saavy business model of Bill Gross. The pay-per-click model that Gross originally founded in his idealab was a revamped idea from his nostalgic activities as a student. The advertisers paying a very low rate for clicks on their advertisements, while Gross relied mostly on volume. Seemed at first like Gross was taking the stairs to the top floor with his methods.  However, by the time the model was changed to CPM, advertisers were paying very large amounts for quality clicks, or clicks that provided the means to a sale or personal contact information.

Gross is the economic builder of Google’s current method of acquiring advertising revenue. Its not hard to understand that Google is the beast of the internet because the model is inherently cyclical: advertisers pay large sums of dollars to gather information while Google provides free portals where information can be accumulated like Gmail and iGoogle! With millions of people online all the time, it is not hard to understand why advertisers are coming straight to Google for the numbers.

In our first class discussion, the first question that popped into my head after seeing Oprah clip was “what is the big deal”? How can a company get so large and lucrative that employees get to play at work and get paid really well?! Battelle includes his discussion with Ted Meisel in chapter five alluding to the je n’ai ce quoi of Google. The reason that competitive like Overture can’t beat Google is that they “lack Google’s sex appeal and broad consumer brand. Did two nerds from Stanford set the sex appeal standard for Google or did the consumers do that? These are questions that YouTube, a site made of citizen media, helps me to grapple with. In the meantime, Battelle talks about the economic growth of Google. Duh, we know that. I’m ready for Battelle to unveil the mystery.


One comment

  1. Astute observations. Keep up the strong critical reflection.

    It is interesting that you raise the point about us, consumers, being responsible for the operational strength of Google. Google would be nothing without a storehouse of information to retrieve. We are responsible for building their database, and they have found a clever business model for making this information accessible.

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