When they first started out, Page and Brin had a distaste for using advertising as the foundation for their business plan. In an academic paper that the two wrote while still at Stanford, they said that "advertising-funded search engines will inherently be biased toward the advertisers and away from the needs of consumers."
It was several years before they changed their tune and accepted the fact that advertising was the only way to become a profitable commercial enterprise. Once they accepted the notion, they went forward with what soon became an extremely sophisticated advertising plan. The Google guys came to view advertising as an important service to consumers. "We look at ads as commercial information, and that goes back to our core mission of organizing the world's information," explains Omid Kordestani, vice president of Global Sales.
To maintain their sense of integrity, advertising is always clearly identified as "sponsored links" at the top of the search listing, and Google does not accept pop-up advertising.
The simple text ads that appear at the top and in other places in Google search results account for almost all of the company's revenue. As an indication of how lucrative advertising is, in 2007 Google had annual revenues of $16.6 billion, with $4.2 billion of profit.
If all goes according to expectation, advertising revenues will only get better. Americans now spend an equal number of hours each week watching TV and surfing the ...