Google may have to buy content provider(s)
Google is likely to have to buy a content provider - or many content providers - in order to continue growing.
Jon Fine of BusinessWeek noted that Google's competitors are buying up content, allowing them to avoid paying content producers for running their ads. If Google is to continue eking out profit from its AdSense online advertising programme, it will need to generate some of the content itself.
Google relies on Internet Advertising for 99 per cent of its revenue, and Mr Fine says: "The formula is familiar: Sell ads, in many cases around content Google doesn't own; turn over the bulk of that revenue to the owner of the content; repeat until the end of time."
However, this can't go on for ever, and as the other major players such as Microsoft and Yahoo buy up sites that generate lots of good quality traffic, the potential for returns from AdSense will diminish.
Microsoft recently bought 1.6 per cent of Facebook for a massive $240 million, and one of the reasons that it was so valuable to Bill Gates' software company was because it kept those eyeballs away from Google.
One solution could be to acquire websites such as Weather Underground that provide information that everyone wants but that don't require an army of reporters.
Return to marketing news headlines
View Marketing News Archive