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MULTI-SIDED PLATFORMS Google’s Business Model

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PATTERNS The heart of Google’s business model is its Value Proposition of providing Google’s Value Proposition to advertisers depends heavily on the number of
extremely targeted text advertising globally over the Web. Through a service
customers it attracts to its Web site. So Google caters to this second group
called AdWords, advertisers can publish advertisements and sponsored links of consumer customers with a powerful search engine and a growing num-
on Google’s search pages (and on an aΩiliated content network as we will ber of tools such as Gmail (Web based e-mail), Google maps, and Picasa (an
later see). The ads are displayed alongside search results when people use online photo album) among others. To extend its reach even further, Google
the Google search engine. Google ensures that only ads relevant to the search designed a third service that enables its ads to be displayed on other, non-
term are displayed. The service is attractive to advertisers because it allows Google Web sites. This service, called AdSense, allows third parties to earn
them to tailor online campaigns to specifi c searches and particular demo- a portion of Google's advertising revenue by showing Google ads on their
graphic targets. The model only works, though, if many people use Google’s own sites. AdSense automatically analyzes a participating Web site’s content
search engine. The more people Google reaches, the more ads it can display and displays relevant text and image ads to visitors. The Value Proposition
and the greater the value created for advertisers. to these third party Web site owners, Google’s third Customer Segment, is to
enable them to earn money from their content.

KP KA VP CR CS KP KA VP CR CS
targeted adsrgeted adsrgeted ads
ta ta advertisersvertisers
ad
advertisers
free searchfree searchfree search web surfers
web surfers
web surfers
content
content
targeted advertisers monetizing monetizing crea
contentcontentcontent
creatorstors
creators
KR ads CH KR CH
Google oΩers distinct
Value Propositions to
C$ R$ C$ R$ three interdependent
Customer Segments

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