Google is an American search engine company that was founded in 1998. The main mission for this company is to organize the world’s information and make it universally accessible and useful. More than 70 percent of worldwide online search requests are handled by Google. Below is a comprehensive analysis on how Google makes its money and how a company can reconcile the need for innovation with fiscal discipline.
Google makes money from “search” through Ad Words which is basically an advertising system whereby advertisers bid on certain keywords in order for the clickable ads to appear in Google’s results. Subsequently, advertisers are obligated to pay for these clicks. The company basically generates revenue primarily by delivering relevant, cost-effective online advertising which is heavily relied by data collected from its users. Ad Words places ads on Google’s webpage while Ad sense and Ad Mob show ads in collaborating websites and mobile applications respectively.
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Innovation normally refers to the creation of effective processes and ideas in a company. It can also be described as the means through which the entrepreneur can create new wealth through producing resources. It necessitates real work and therefore should be managed like any other corporate function. Innovation can basically increase the likelihood of a business to succeed since it endows existing resources with enhanced potential for creation of wealth.
Companies should invest some of its capital in innovation because it creates a worthy future prospect for the business. Rather than viewing innovation as a potentially risky task, a company should accept the fact that without innovation progress is unmanageable. Correspondingly, these innovation processes should produce more than they cost and it should also facilitate the knowledge creation needed for decision making in uncertain environments.
