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EDITIONS
Monday, 30 September, 2002, 12:06 GMT 13:06 UK
Good returns for Google's business
Google sign, Google
The Googleplex: Home to a profitable business

The search engine Google is a rarity among dot.coms as it has found ways of making money.

This success has come largely because Google has not done the things that have undone other dot.coms.

Google has not done any advertising or canvassed hard for customers. Nor has it floated on the stock market.

Last year Google reported that it was already operating at a profit. Analysts estimated that it was making revenues of $50m a year.

Some of that money comes from the search systems Google sells to companies who use them to index and search their internal networks. Others, such as Yahoo, use them to power searches on their own sites.

But most of that revenue comes from advertising.

Tuned ads

Regular Google users will be familiar with the sponsored boxes that pop up alongside the list of results it returns when searching.

Britney Spears, AP
Names can cause trouble for web searchers
Companies and people pay to have their ad linked to particular searches and terms. Many tweak which terms they want to be associated with on a minute-by-minute basis.

Omid Kurdestani, Google sales boss, told BBC News Online that many of its customers, such as sellers of concert tickets, need to be able to tune their requests quickly.

"You can make changes to your choices and have an immediate effect on the site," he said.

The price of a term changes to reflect the number of people using them. Google is currently handling 150 million searches per day, so some terms or combinations of words can experience huge demand.

"The diversity has a very long tail," he said, "there are very popular searches and some very obscure ones too."

Google is not the only company offering such a service and has come late to a market pioneered by a company called Overture.

The fact that people only pay when someone actually clicks on an advert is making the system very popular, said Mr Kurdestani.

Public pressure

The next step is to syndicate the search term results to partners who already use the Google search software on their own site.

Road sign, BBC
Cars could soon get Google search systems
But despite the fact that Google is making money from the advertising it has no plans to become a portal or radically alter that minimal homepage, said Mr Kurdestani.

It is looking at making its search systems more widely available.

Google technology is already being used on mobile phones in Japan. It is also working with BMW on voice-driven search systems for cars.

"The goal is never to put the revenue ahead of the user experience," he said

"We are different to portals that want to lure people deeper in and sell them services."

The company also has no plans to go public.

"We are looking at it as a financing event and asking, 'Do we need the funds to invest in new areas and is this the right time to go public?1

"Both the answers to those questions is no," said Mr Kurdestani.

See also:

24 Sep 02 | Technology
12 Sep 02 | Technology
08 Apr 02 | Business
13 Mar 02 | Science/Nature
06 Aug 01 | Business
22 Jan 01 | dot life
24 Jul 02 | Technology
10 May 02 | Business
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