If you don't Google, you probably aren't finding what you want online. Google operates the leading Internet search engine, offering targeted search results from billions of Web pages. Results are based on a proprietary algorithm -- Google's technology for ranking Web pages is called PageRank. The company generates nearly all of its revenue through ad sales. Advertisers can 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. Google subsidiaries include YouTube and DoubleClick. Founders Sergey Brin and Larry Page each have nearly 30% voting control of the firm.
Surprising no one, Google reported solid earnings for fiscal year 2010. For the year, its revenues reached more than $29 billion, and it earned a profit of $8.5 billion, representing about a 30% jump from the previous year. The company attributed its positive financial results to its success in advertising, as well as newer efforts in mobile and video. In particular, revenue from online video leader YouTube doubled in 2010 compared to the prior year.
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), and photo sharing (Picasa). Other tools Google offers to help its users make the most of their digital life include an online image library (Google Images), general news stories (Google News), interactive maps (Google Maps), and a Web browser (Google Chrome). In addition, its Android operating system is a platform for mobile and tablet products, and its Nexus S is an Android smart phone.
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. 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.
This follows another key change implemented by Google. After receiving complaints that its search results contained too much content from low-quality sites, in 2011 the company made changes to its search algorithm. The changes were designed to make search results with sites featuring original content appear above sites that employ "content farming" practices. ("Content farm" is a derogatory term used to describe sites specifically designed to generate ad revenue through attracting page views without providing relevant or factual content.) The algorithm change affected nearly 12% of Google's US query results.
Meanwhile, Google is continuing its strategy of expansion via acquisitions and new product development in order to enter new markets and maintain a portfolio of innovative offerings. The company launched its Google + social networking service in 2011 to directly compete with market leader Facebook. It also spent some $1.4 billion on 57 acquisitions during the first nine months of 2011. One of these deals was the purchase of ZAGAT, a service that rates restaurants and other local businesses based on consumer surveys and reviews. The deal, worth some $151 million, represents Google's efforts to further expand its user-generated content offerings, as well as its strategic push in the local advertising space.
Google announced its biggest acquisition to date in 2011 when it agreed to buy phone hardware maker Motorola Mobility Holdings for $12.5 billion. The deal is a major indicator that the company is shifting its strategy beyond its core Internet operations to increase its penetration in the fast-growing mobile market. The purchase will allow it to better compete with smart phone rival Apple by bolstering the adoption of its Android mobile software. Google plans to manage Motorola Mobility as a separate business.
Earlier in 2011, the company purchased ITA Software for about $700 million in order to enter the online travel market. In order to increase its capabilities in graphical and interactive display ads, the company acquired online-ad firm Admeld at a rumored acquisition price of around $400 million. Around that same time, Google also obtained daily deal site Dealmap in order to directly compete with Groupon, which turned down Google's $6 billion takeover offer in 2010.
In order to face its international rivals head on, Google operates in more than 50 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. When it began doing business in China, where Baidu.com is the market leader, Google initially made a controversial agreement with the Chinese government to censor search results in that country. After feuding with the Chinese government over censorship issues, in 2010 Google began publishing a link on its government approved ".cn" domain (Google.cn) to an uncensored website based in Hong Kong (Google.com.hk).
Google takes its name from "googol," the mathematical term for the value represented by a one followed by 100 zeros. (In keeping with that theme, the company's headquarters in Mountain View, California, is referred to as "the Googleplex," a play on googolplex -- a one followed by a googol zeros.)
Executive chairman Eric Schmidt has about 10% voting control.