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Media trends digest
– 2006
Google’s dominance powered by AdWords (15 August)
 Far from its humble college-room beginnings, Google is now flexing its digital muscle as it contends for domination in online services.
Last week’s deal with Rupert Murdoch’s media behemoth News Corporation will see Google power MySpace.com’s search engines and keyword advertising, in a three-year contract worth $US900 million ($A1.2 billion). It’s not just the cash that Google is interested in, though – the deal will allow them advertising access to the majority of the News Corp/Fox Interactive Media sites.
AdWords, Google’s advertising offshoot, uses keyword recognition to display context-relevant, text-based advertising on Google search pages, Google network websites and blogs, and in Gmail users’ accounts. Advertisers nominate the words that will trigger their advertisement, and pay Google based on the number of ‘clicks’ on their ad.
Search advertising is now the biggest earner in internet advertising, and Google is at the helm after fending off competitor Yahoo Search Marketing for the lucrative News Corp/MySpace.com deal. It’s understandably important to them – according to Google’s 2004 financial report, AdWords provides 99% of Google’s income, supporting their multitude of free online services. Since then, they haven’t reported figures – just exponential growth.
Since their rise and rise in online searching (they now provide specialist search engines for images, news, videos, books, academic journals, and blogs), Google have been aggressively innovative. Google engineers are allowed 20% of their time to freely explore, research, and pursue any idea they’re passionate about.
As a result, Google’s ventures are many and varied - from email and blogging services to street maps and Google Earth, a digital, searchable 3D globe you can download to your PC. What’s more, they’ve value-added in typical Google style - you can search for accommodation, restaurants, shops and more, then zoom in to a street-level map and satellite photos to find your way there. For the adventurous, there’s Google Space and now Google Mars…
When starting out, Google were careful not to aggravate Microsoft, but their new-found might has led them into dangerous territory. Over the past few years, Google have developed free online services in direct competition with Microsoft products, and they seem to be winning over the masses. Gmail, Google’s answer to Hotmail, does what Google does best - provides a superior service with simple, user-friendly features and more power. They have just taken control of Writely, an online document editor to rival Word - but better, with online storage and multi-user collaboration.
It’s all possible because of AdWords. Google quickly revolutionised internet searching, then turned their software engineers onto advertising, and it seems to have worked. Web users like the ads because they aren’t intrusive (unlike banners and pop-ups); advertisers like them because they work; and stockholders like them because they’re keeping the coffers full. While funding a growing portfolio of online services, Google have changed the face of internet advertising, and they’re keeping everyone happy – except the companies they’re competing with.
Google’s ability to innovate and to capture the attention of the masses is reason enough for competitors to fear them, but the maverick search company is showing no sign of slowing down. With the recent News Corp deal under their belt, one can only wonder – where will Google go next?
By Kate Freeth
Links
AdWords News
Google Blogoscoped – independent coverage and analysis of Google-related news
The Age newspaper coverage of the Google-News Corp deal
Article from Clickz.com: The value of content-related text advertising
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