It seems a silly discussion today, but it was big business then. Publishers and editors were of the mindset that Google was somehow stealing their content by indexing it and serving it up to Google’s search engine.
As more publishers realized the number of relevant readers they were getting to their websites, Google turned from axis to ally.
So with publishers on board about the possibilities that Google could bring them (in both traffic and Adsense sales), it set the stage for Google’s growth.
In 2010, Google did almost $30 billion in revenue and $8.5 billion in profit. They have $34 billion in short-term investments and cash-on-hand.
And Google continues to be the place where people find stuff. They are the problem solver. They link people to other people’s content, spatter it with a bit of advertising, and make a ton of money doing it.
Google Is Changing The Model
For all of its amazing innovations such as Google Voice, Google Apps and even their Android platform, the large majority of Google’s revenue still comes from Adsense. The product diversification has happened, but the revenue results are lagging. For those of you who understand the stock market, Google trades at a PE Ratio of 12.3, a historic low. This means that investors look at Google as more a value play and not a growth stock any longer.
So where does Google go from here?
Ah yes, to Content.
I need to find something. I go to Google. I do a few searches on Google. I click on a link. After that, for the moment, Google loses me as a revenue opportunity.
But what if?
I need to find something. I go to Google. I do a few searches on Google. I click on a link. That link is a piece of Google content (video, textual, audio, etc.). Google monetizes that content through more advertising and sponsorship.
Yep, this is the future. Heck, it’s the present. The clear start of this was Google’s purchase of restaurant-review media company Zagat a few months ago. No one made a peep. Everyone seemed happy.
And now, according to the Wall Street Journal, Google is putting up $100 million to create content for its YouTube franchise. Google is the publisher investing in content in order to monetize that content on the back-end through sponsorship.
In a matter of just a few weeks ($125 million investment in Zagat and a $100 million YouTube content investment), Google has become one of the largest publishers on the planet. And now there is no stopping them.
What Should You Expect from Google?
Regarding content, here are just a few possible events that shouldn’t surprise you over the next few years:
- Google will provide customized content for both brands and media companies.
- Google will start purchasing the leading niche providers of content in multiple verticals.
- Google will begin to hire journalists and content creators of all types to provide content for all Google platforms.
It makes too much sense. Google can stay with the consumer throughout the purchase cycle.
I’m not saying that this is good or bad, I’m just making the point that this is happening…and that this will affect content creators (media-side and brand-side) in all industries and verticals. Google will be the largest content producer on the planet. We need to start preparing for this now.