John Gruber writes an insightful piece (Daring Fireball: Google Is an Advertising Company) on why comparing Google to Microsoft is just plain wrong. His observation: “follow the money.” Google’s advertising profits totaled $712 million in the first six months of 2005. Clearly the internet giant is an advertising firm, not a software juggernaut.
What’s Google’s secret sauce? Google creates the context in which advertising becomes extraordinarily effective. Google has tilled a fertile “garden” where relevant non-obnoxious AdSense ads are liberally planted. Thousands of small websites running AdSense share a harvest that has rapidly become Google’s cash crop.
Google’s search engine and AdSense technology draw people with a clearly definable intention. In short, Google can claim that surfers truly are “searching for what you sell.” Advertisers from all industries are shifting ad dollars from print and broadcast to online properties.