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Business LibreTexts

14.1: Introduction

  • Page ID
    4587
  • Learning Objectives

    After studying this section you should be able to do the following:

    1. Understand the extent of Google’s rapid rise and its size and influence when compared with others in the media industry.
    2. Recognize the shift away from traditional advertising media to Internet advertising.
    3. Gain insight into the uniqueness and appeal of Google’s corporate culture.

    Google has been called a one-trick pony (Li, 2009), but as tricks go, it’s got an exquisite one. Google’s “trick” is matchmaking—pairing Internet surfers with advertisers and taking a cut along the way. This cut is substantial—about $23 billion in 2009. In fact, as Wired’s Steve Levy puts it, Google’s matchmaking capabilities may represent “the most successful business idea in history” (Levy, 2009). For perspective, consider that as a ten-year-old firm, and one that had been public for less than five years, Google had already grown to earn more annual advertising dollars than any U.S. media company. No television network, no magazine group, no newspaper chain brings in more ad bucks than Google. And none is more profitable. While Google’s stated mission is “to organize the world’s information and make it universally accessible and useful,” advertising drives profits and lets the firm offer most of its services for free.

    Figure 14.1 U.S. Advertising Spending (by selected media)

    b967605e3850f947cb350418a4612b76.jpg

    Online advertising represents the only advertising category trending with positive growth. Figures for 2009 and beyond are estimates.

    Data retrieved via eMarketer.com.