Why is Google doing so well? The question is begged, when a small company like Google has profits of $369 million in only one quarter. That's over $100,000 profit for each employee in only three months and is on track for a Return on Investment of at least 50%. Google has net profit margins of about 30%, which is much better than the monopolist Microsoft's 22% net profit margins.
The answer to the question is really simple and is two-fold. First, of the 140 or so hits that I received in the last 24 hours, 92 were new readers referred from Google, or 2/3rds of all of my traffic. In comparison, Yahoo referred 6 new readers and AOL referred 2 new readers. In other words, Google has huge amounts of traffic and is crushing its competitors.
Second, it has found a way to turn that traffic into revenue. While Google doesn't make any money by referring people to Carried Away, it makes a whole lot of money by selling targeted ads that complement referrals to Carried Away.
I see little to stand in the way of jaw-dropping growth for Google for a while. The worldwide advertising market is gigantic and it would be difficult to accuse Google of being a monopoly, even if Google were to mushroom in size. Compare to Microsoft as an enterprise resting on sales in the software market, which is a market a whole lot smaller than advertising. It's clear that even Microsoft is at a rather large disadvantage, if it were to try to compete with Google.
My hat is off to Google for a more than fantastic quarter. Google is a jewel of American entrepreneurialism.
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