How do Google and Other Tech Giants make Money?
If we can access every app or website for free, then how do they generate revenues? Lets check..
We have been using google products like google docs, google maps, Facebook, snapchat etc. for so many years now but we never pay a single rupee to them. We have almost all the major apps especially from google pre installed in our new phones. So how do these companies make money without selling their software? Well, There is a very clever business models which comes into picture here. Some of them are listed here.
1.Revenue Through Ads: You might have seen ads while using YouTube or Facebook. Companies charge advertisers fees for showing their ads on their app or website. There are many ways through which the price of Ad is decided. It can be through Pay Per Impression(PPI) where a price is set for a fixed number of clicks to the ad or they can charge every time user clicks the ad called as Pay Per Click (PPC). There happens an actual auction where advertisers put a bid every time visitor loads a page and the largest bid wins. Displaying of ad also depends upon other factors like relevance of ad, authenticity of ad, etc.
2. Premium Model: Some apps are free to download but once you start using them, they ask for money to unlock ‘special features’. For example: Spotify. Spotify asks for money in case you want to listen music without ads. Similar is the case with YouTube. You might have noticed how the number of ads are increasing on YouTube making us wanting to buy the ads free version. This premium model is vastly used in games such as Candy Crush or Subway Surfers. The new icons or more coins propel us to use real money to access them.
3. Subscriptions: Similar to the premium model, subscriptions allow us to access the special features of a particular website or app on monthly basis like electricity bill. Medium or WSJ(Wall Street Journal) allow few articles for free but insist on a monthly subscription for unlimited access. Similar is the case with LinkedIn. It has LinkedIn premium which allows lots more features like in mail messaging to recruiters on a subscription.
Apart from the above points, There are certain money making strategies particular to companies like
Apple generates a staggering 62.8% of its revenue from the iPhone
Amazon Web Services (AWS) is well-known for being Amazon’s most profitable segment, and it counts for 11.0% of revenue
Facebook generates almost all revenue (98.5%) from ads
and many more…
Read more at:
https://www.visualcapitalist.com/how-tech-giants-make-billions/