Google's strategic decision contributed to who they are today
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A lot can be learned by looking at the differences between Google and Yahoo that contributed to the success of one and the almost total demise of the other.
Image may be NSFW.
Clik here to view.
First let me clear up the misinformation about the Google story perpetuated by various TV specials.
In case you don’t remember, Google did not invent pay per click advertising (PPC). PPC advertising is an advertising model whereby you are not charged for your ad until someone actually clicks your link. This is a brilliant strategy. According to Wikipedia, credit for the concept of the PPC model is generally given to Idealab and Goto.com founder Bill Gross. (Read more)
It quickly became the gold standard for smart marketers and all the big web players immediately started using the pay per click ad model.
Advertisers loved the fact that, unlike older traditional forms of advertising which billed you based on the number of “impressions” (how many people saw your ad), with the PPC model you were billed only after a web visitor expressed enough interest to at least click on your link.
This greatly increased the likelihood of a sale and gave advertisers a way to measure results.
What Google did that was brilliant
The unique spin Google put on it, which was absolutely brilliant, was to introduce Google Adsense. Adsense is a revenue sharing system which shares the advertising revenue with the operators of the web site where the visitor originally clicked the ad.
Adwords, on the other hand, is Google’s pay per click ad brand.
An advertiser buys Adwords to sell their wares. Almost any web site can partner with Google and share in the revenue from the traffic they provide, simply by adding some Adsense code that allows Google to feed their ads on the site.
The way this played out was that many, many web site owners, from small business sites like ours to sites like the New York Times and other giant players, added Google Adsense code to their pages, displayed the ads from Google’s advertisers, and reaped the rewards of the Google revenue sharing, while passing the visitor back to the advertiser. It’s a good system which benefits everyone involved.
By the way, if you operate a web site and want to learn how you can earn income by adding Google Adsense to it, read my colleague, Joel Comm’s book, The Adsense Code. and learn all the in’s and out’s of making the most of it.
While businesses like Yahoo, Goto.com, and others earned money from the traffic on their own web site, Google was earning (and sharing) the revenue from ad clicks on literally hundreds of thousands of web sites of every imaginable size.
This is a classic example of the difference between being willing to share your revenue and leverage your relationships versus trying to keep it all to yourself.
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By following the idea Mark expressed in the above quote, one of my favorite, Google earned significantly more revenue than the others and went on to become the giant it is today.
Whoever said, “Greed is good” was a fool!
What this has to do with your business
Aside from being a somewhat interesting business story, the real value is in looking at it from the perspective of your own company.
Are you more like Google or Yahoo?
If you answered the latter, how might you apply some of the concepts Google and companies like them are using to leverage their relationships and grow?
For example, the first Starbucks I remember seeing was inside the Hotel in the Inner Harbor in Baltimore, Maryland.
Later, while visiting Washington, D.C., I remember being quite pleased to see another Starbucks in the Marriott where we were staying. As some who enjoys coffee hotels are always a big letdown. It was nice to have a higher quality alternative.
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JV Alert Live event where top marketers from around the world meet to network and create relationships. That’s yours truly next to Stuart Tan, one of the leading business people in Singapore and a terrific guy.
What are some of the strategies you could employ to leverage the assets in your business?
In a future post, we’ll explore some ways different types of businesses can “make a bigger pie” for themselves and their partners.
For now, brainstorm a few ways you might leverage your relationships with vendors, distributors, colleagues, customers, and even your competitors. Yes your competitors!
Please share this with your network and anyone you feel would enjoy reading it.