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MULTI-SIDED PLATFORMS

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As a multi-sided platform Google has a very distinct revenue model. It makes Google’s Key Resource is its search platform, which powers three diΩerent PATTERNS
money from one Customer Segment, advertisers, while subsidizing free services: Web search (Google.com), advertising (AdWords), and third-party
oΩers to two other segments: Web surfers and content owners. This is logi- content monetization (AdSense). These services are based on highly complex
cal because the more ads it displays to Web surfers, the more it earns from proprietary search and matchmaking algorithms supported by an extensive
advertisers. Increased advertising earnings, in turn, motivates even more IT infrastructure. Google’s three Key Activities can be defi ned as follows: (1)
content owners to become AdSense partners. Advertisers don’t directly buy building and maintaining the search infrastructure, (2) managing the three
advertising space from Google. They bid on ad-related keywords associated main services, and (3) promoting the platform to new users, content owners,
with either search terms or content on third party Web sites. The bidding and advertisers.
occurs through an AdWords auction service: the more popular a keyword,
the more an advertiser has to pay for it. The substantial revenue that Google
earns from AdWords allows it to continuously improve its free oΩers to
search engine and AdSense users.

KP KA VP CR CS KP KA platform VP CR CS
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Google has one main platform
Revenue Stream that
subsidizes other oΩers
(Revenue Stream is R$ R$ keyw C$ R$ R$ keyw
keyw
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replaced by “free”) free platform costs free
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