Do you know reason behind google making money evenif its free ?

Previous year Google made £2.5bn in the UK. So how does a company make so much money when it seems to provide all of its services for free? Lets find out ....

Google is an advertising company and its biggest product is you, the user. The company controls almost 90 per cent of the search market in the UK, and almost 96 per cent of Google's revenue still comes from advertising.

Every day the site returns 1 billion search results globally and serves up billions of ads alongside. The secret to success is in the scale of its operation.

Your online habits from YouTube, search and Gmail are all used to profile your behaviour. On top of this, Google follows your surfing habits through its Analytics and Adsense codes, embedded on web pages to track your interests outside of search.

Targeted advertising

Companies use Google AdWords to have their results displayed to specific audiences, thanks to the search engine's advanced algorithms. AdWords is a cost per click service, so if you do not click a link then Google does not make any money directly from your search.

AdWords brings in roughly 70 per cent of the company's advertising revenue. Google's AdSense allows advertisers to join its network and display ads on its website. A large number of news websites in the UK use this service, so when you log on to scan the headlines, Google makes money and learns more about your browsing habits. Display advertising is usually charged at cost per page impression, because the huge volume of online traffic ads is often sold cheaply at a cost per thousand impressions.

Trusted brand

But Google is not just a search business. It provides maps, cloud computing and documents, email services and a social network. These services are expensive to run but help to draw more users in, build a trusted brand, and gather more vital data about users.

Google is expected to make $3.6bn from YouTube this year as traffic continues to grow and more pre-roll video ads are displayed.

The company dominates the mobile market, licensing out its Android operating system for free, but making a large profit from the venture through search traffic, display ads and a percentage of every Play Store sale.

Collecting user data

Google's browser Chrome holds a 30 per cent market share, allowing the company to generate search queries without having to share revenue, as is the case with Firefox and Safari. Chrome provides valuable data about browsing habits for the company, and has been described it as an "exceptionally profitable" product.

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