If Blogger is not profitable, then what’s its purpose? Well here are some theories.
(1) Delayed profits. Google wants Blogger to be to blogging software as Microsoft is to operating systems. Once Google controls the entire blogosphere, suddenly they will start charging money for the service, and there won’t be any other place to go because all the competition will be out of business. After all, it’s hard to compete with a free product.
(2) Synergy with the Google search engine. Maybe by searching through all the Blogger posts, Google can use this mass of information to enhance its search engine results? Critics to this theory have pointed out that Google can already spider these pages, so what additional value is there to controlling the database where the Blogger posts are stored?
(3) Another synergy theory. By owning Blogger, Google has access to the referral logs for hundreds of thousands of active blogs. Google normally can’t see the referral logs for the websites it spiders. Maybe Google’s computer scientists think that the referral logs might contain information that could be used to produce better search engine results?
(4) The clueless theory. Google’s management figured that blogs were the next big thing, and they wanted a piece of the action even though they have no clue how it will actually bring profit to the company.
I do not know
After all this analysis, I’ve come to the conclusion that I still don’t know how Google thinks that Blogger will make money. If anyone has any ideas, feel free to comment.
(1) Delayed profits. Google wants Blogger to be to blogging software as Microsoft is to operating systems. Once Google controls the entire blogosphere, suddenly they will start charging money for the service, and there won’t be any other place to go because all the competition will be out of business. After all, it’s hard to compete with a free product.
(2) Synergy with the Google search engine. Maybe by searching through all the Blogger posts, Google can use this mass of information to enhance its search engine results? Critics to this theory have pointed out that Google can already spider these pages, so what additional value is there to controlling the database where the Blogger posts are stored?
(3) Another synergy theory. By owning Blogger, Google has access to the referral logs for hundreds of thousands of active blogs. Google normally can’t see the referral logs for the websites it spiders. Maybe Google’s computer scientists think that the referral logs might contain information that could be used to produce better search engine results?
(4) The clueless theory. Google’s management figured that blogs were the next big thing, and they wanted a piece of the action even though they have no clue how it will actually bring profit to the company.
I do not know
After all this analysis, I’ve come to the conclusion that I still don’t know how Google thinks that Blogger will make money. If anyone has any ideas, feel free to comment.
This being my first real blog I decided to scan through the past 6/7 months of other Blogs written by some of my colleagues here at TotallyCommunications just to get an idea on how Blogs are written.
What I found was a repository filled with compelling and mentally stimulating articles. Each of which containing detailed descriptions/guides/reviews on almost anything one would find in the newspaper, except the subjects were usually computer related.
After spending a short period of time thinking what I should write about, I decided to write on something which I had often wondered about.
At this moment in time, as I write this article, my browser is open and running Firefox 3.0. Like all machines running a Windows operating system it comes with Internet Explorer loaded already, but like less than half of internet users I chose to take the initiative and downloaded Mozilla Firefox. Something I have absolutely no regrets about. The reasons for this are numerous but will have to wait until my next blog post.
The much anticipated launch day for Firefox 3.0 had 1 million users click on and download it in the first 24 hours alone. For something that is so widely used it makes sense to me that they put so much effort into their project. Firefox has made its owners over $74 million in the past year. But where does this money come from because I certainly didn't pay to download the product, and have thus far used it on a daily basis and never paid a thing. A lot of it comes from development grants and advertising revenue, however where does the rest of it come from?
The question can be solved by looking at the way that Firefox 3.0 is presented. What is it inside the browser that could make Firefox money? The answer is a found inside the browser itself.
ALL Firefox 3.0 browsers come equipped with a Google search bar in the top right hand corner. This cannot be removed or edited easily. For AdSense Referral publishers , Google pays $1 per referral (every person who installs Google Toolbar TO their Firefox) or per conversion (a conversion occurs when someone successfully installs Firefox WITH the Google Toolbar). This does not sound like much but considering that almost two thirds of ALL UK residence are on the internet, and almost 50% of this number uses Firefox, even in the UK alone the number of Firefox users is staggering*.
The ease of using this search bar also means that I will not even have to visit the Google homepage and do a search from there.
But the Google search bar has more functionality then it appears. If I was to click on the Google G image. A list of other sites appears to me. These include Amazon, Wikipedia, eBay. Almost all the sites which I would do a search in. This removes the hassle of having to go to the site each time I wanted to perform a search. Search engines can be easily added and removed allowing the user to take control of their search bar. A very neat little function indeed.
What I found was a repository filled with compelling and mentally stimulating articles. Each of which containing detailed descriptions/guides/reviews on almost anything one would find in the newspaper, except the subjects were usually computer related.
After spending a short period of time thinking what I should write about, I decided to write on something which I had often wondered about.
At this moment in time, as I write this article, my browser is open and running Firefox 3.0. Like all machines running a Windows operating system it comes with Internet Explorer loaded already, but like less than half of internet users I chose to take the initiative and downloaded Mozilla Firefox. Something I have absolutely no regrets about. The reasons for this are numerous but will have to wait until my next blog post.
The much anticipated launch day for Firefox 3.0 had 1 million users click on and download it in the first 24 hours alone. For something that is so widely used it makes sense to me that they put so much effort into their project. Firefox has made its owners over $74 million in the past year. But where does this money come from because I certainly didn't pay to download the product, and have thus far used it on a daily basis and never paid a thing. A lot of it comes from development grants and advertising revenue, however where does the rest of it come from?
The question can be solved by looking at the way that Firefox 3.0 is presented. What is it inside the browser that could make Firefox money? The answer is a found inside the browser itself.
ALL Firefox 3.0 browsers come equipped with a Google search bar in the top right hand corner. This cannot be removed or edited easily. For AdSense Referral publishers , Google pays $1 per referral (every person who installs Google Toolbar TO their Firefox) or per conversion (a conversion occurs when someone successfully installs Firefox WITH the Google Toolbar). This does not sound like much but considering that almost two thirds of ALL UK residence are on the internet, and almost 50% of this number uses Firefox, even in the UK alone the number of Firefox users is staggering*.
The ease of using this search bar also means that I will not even have to visit the Google homepage and do a search from there.
But the Google search bar has more functionality then it appears. If I was to click on the Google G image. A list of other sites appears to me. These include Amazon, Wikipedia, eBay. Almost all the sites which I would do a search in. This removes the hassle of having to go to the site each time I wanted to perform a search. Search engines can be easily added and removed allowing the user to take control of their search bar. A very neat little function indeed.
Where’s the revenue?
It was easy to see how the old Blogger was supposed to make money. Blogger offered you a free service that had a limited feature set, but then you had to pay a recurring fee to upgrade to the more powerful Blogger Pro. And it was the same story with the web hosting. If you wanted more bandwidth and to get rid of the banner ads, you had to pay money to upgrade.
But then Google bought Blogger and Blogger went to a totally free pricing model. Currently there is nothing to buy at Blogger. How is there any money in it if it’s free?
The only obvious source of income is from the ads that appear at the top of Blogger hosted blogs.
Advertising is how the Google search engine makes money. But the advertising revenue per page view is surely a lot lower for Blogger than for the Google search engine. People using the Google search engine are searching for something specific, so it’s probably about ten to twenty times more likely that they will see an ad at the top or right side of the screen that they will be interested in. I have ads on my blog, so I know how little interest there is in them.
So how much money might Google be making from those Blogger ads? Well I did some calculations, and I assumed that Blogger has 1.5 million blogs, but only 300,000 of them are active, and that the average active blog gets 25 page views per day (most blogs don’t get very many visits). With these numbers, Google might be making $2 million per year in advertising revenue. It might cost Google $500,000 per year for the storage space, servers, bandwidth, and personnel to host all those sites and run the Blogger application. So Google is making a $1.5 million profit.
It was easy to see how the old Blogger was supposed to make money. Blogger offered you a free service that had a limited feature set, but then you had to pay a recurring fee to upgrade to the more powerful Blogger Pro. And it was the same story with the web hosting. If you wanted more bandwidth and to get rid of the banner ads, you had to pay money to upgrade.
But then Google bought Blogger and Blogger went to a totally free pricing model. Currently there is nothing to buy at Blogger. How is there any money in it if it’s free?
The only obvious source of income is from the ads that appear at the top of Blogger hosted blogs.
Advertising is how the Google search engine makes money. But the advertising revenue per page view is surely a lot lower for Blogger than for the Google search engine. People using the Google search engine are searching for something specific, so it’s probably about ten to twenty times more likely that they will see an ad at the top or right side of the screen that they will be interested in. I have ads on my blog, so I know how little interest there is in them.
So how much money might Google be making from those Blogger ads? Well I did some calculations, and I assumed that Blogger has 1.5 million blogs, but only 300,000 of them are active, and that the average active blog gets 25 page views per day (most blogs don’t get very many visits). With these numbers, Google might be making $2 million per year in advertising revenue. It might cost Google $500,000 per year for the storage space, servers, bandwidth, and personnel to host all those sites and run the Blogger application. So Google is making a $1.5 million profit.
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