Google provides multiple IT services and products to people for free. For example: Email (Gmail), Online Office Applications (Google Docs), Cloud Storage (Google Drive and Google Photos), Map, Online Video Sharing (YouTube), Communication Platform (Handouts) etc. However, we should know any IT services and products can not long live without finances supporting. If Google does not have money to buy hardware servers, how can they provide so great YouTube, Google Docs, Google Photos services for free ?
Where is Google’s Income From ?
Google does NOT earn money from those IT services and products which we mentioned above. Google is actually operate advertising. Google’s major revenue is from their advertising products such as AdWords. If no ad, Google would not provide so popular free products and services because there would be no money to support.
Google’s 88% Revenue is from Advertising
Please check the chart from Mekko Graphics. They made the chart in 2018 January for reporting 5 top Tech companies’ revenue: Apple, Google, Microsoft, Amazon, Facebook.
(image is from Mekko Graphics)
We can see Google (Alphabet)’s 88% of revenue was from Advertising. 11% was from Google Play, Android and their Mobile phone. (By the way, Facebook relies on Ad too)
… Alphabet and Facebook get almost all of their revenue from ads. Apple relies mostly on hardware and Amazon relies mostly on product sales. Microsoft has the most diverse sources of revenue with a mix of software, hardware and cloud revenue. Overall the 5 tech giants rely on hardware for 36% of their 2016 revenue with Apple’s products accounting for most of this. Online retail, mostly from Amazon, contributes 22%. Facebook, Google YouTube and Bing ads make up 20%. Software and cloud and server revenue make up 6% each. (from Mekko Graphics)
Google and Google’s fans call Google a tech company. Now please know: Google is very smart, they use great tech to run their Advertising business to earn money, then invest in technologies. They don’t rely on technologies to get revenues majorly at present, but we believe FREE services and products are just for compositing with other IT giants such as Apple and Microsoft. If advertising can not bring income for Google, they will have to rely on technologies.