If you don't know what the term Google means, there's a leading Internet search engine you can use to find out. Google offers targeted search results from billions of Web pages. Results are based on a proprietary algorithm; its technology for ranking Web pages is called PageRank. The firm generates revenue through ad sales. Advertisers deliver relevant ads targeted to search queries or Web content. The Google Network is a network of third-party customers that use Google's ad programs to deliver relevant ads to their own sites. In October 2015, Google formally became part -- and by far the biggest part -- of the Alphabet Inc. holding company.
Because the technology industry demands constant innovation, Google has been nothing short of relentless in its efforts to develop or acquire new services and products in order to stay ahead of such rivals as Yahoo! and Microsoft. Since its founding as search engine, the company has branched out to provide Web portal services such as Webmail (Gmail), blogging (Blogger), photo sharing (Picasa), interactive maps (Google Maps), and Web browsing (Google Chrome).
In addition, its Android operating system is a platform for mobile and tablet products; Google has also released an Android smart phone. The company sells digital content such as apps, music, and movies through Google Play Store (formerly called Android Market). Google subsidiaries include YouTube and DoubleClick.
Despite this plethora of diverse offerings, Google's lead in Internet search is still fueled by its advertising system, comprised of its AdWords and AdSense products (90% of its revenue stemmed from advertising in fiscal 2015). Customers of AdWords seek to drive traffic from Google to their sites and generate leads. Advertisers bid on keywords and have their ads appear as links on the right-hand column of Google's search results page under the sponsored links heading.
Through AdSense for Search, Google powers the search capabilities of other publishers' websites and search engines product. With AdSense for Content, Google delivers ads to a publisher's website that are targeted to the content on the publisher's site, and the publisher shares in the revenue generated when readers click on the ads. AdSense customers are publishers of third-party websites that comprise the Google AdSense Network. The AdSense Network includes many small websites, but has also attracted several big players in online publishing and e-commerce, including AOL, Ask.com, and NYTimes.com.
In order to face its international rivals head on, Google operates from more than 70 offices in about 40 countries. International domains include Google.ba, Google.dm, Google.nr, Google.co.jp and Google.ca, and the Google interface is available in more than 100 languages. However, the US accounted for 46% of the company's revenue during fiscal 2015.
Google has historically reported year-over-year revenue and net income growth, and fiscal 2015 was no different. Its revenues climbed from $66 billion in fiscal 2014 to a record-setting $74.9 billion in fiscal 2015. The company's net income also surged 13% from $14.4 billion in fiscal 2014 to reach a milestone $16.3 billion in fiscal 2015.
The historic growth for 2015 was attributed to the increase in advertising revenues generated by Google websites, Google Network Members' websites, and hardware product sales. The growth in advertising revenue was fueled by a 16% spike in Google website revenue as a result of increases in mobile search due to ongoing improvements in ad formats, as well as growth in YouTube video advertising across TrueView and Google Preferred.
Google's cash flow from operations has also significantly increased year-over-year. Its cash flow in fiscal 2015 increased to $26 billion compared to $22.4 billion in 2014. The spike was mainly due to the company's higher net income and changes in working capital.
In order to enter new markets and maintain a portfolio of innovative offerings, Google is continuing its strategy of investment in innovation and new product development.
Mergers and Acquisitions
During fiscal 2015 Google paid $380.2 million to acquire bebop Technologies Inc. (bebop), a London-based company with a cloud-based development platform focused on enterprise applications.