With millions of people browsing through Google daily for free, everyone at a certain point in their life wonders how Google makes money.
Let me answer this question for you and end the curiosity.
Google makes 80% of its money from advertisements. At the same time, the other services that contribute to the revenue of Google are Google Cloud, Google’s acquisition, and hardware like Google Pixel, laptops, earbuds, etc.
After researching in detail and going through all the quarterly and fiscal reports of Google, I have provided a detailed breakdown of Google’s income source.
Let’s get into it, shall we?
Google Financial
As I was researching this topic, I came across its financial report for the first quarter of 2023. It included all the details of the ways Google makes money from.
According to the financial reports released on 25th April by Google, It generated a revenue of $69.8 billion in the first quarter of 2023. Hence a 3% year-over-year increase was recorded in the revenue generated.
Almost $40,359 million was generated in revenue by Google search and others in the quarter. At the same time, YouTube ads generated a revenue of $6,693 million.
So what are the other sources of income for Google?
The following table displays the revenue generated by different sources of Google in the first quarter of the year 2023.
Sources Of Income/ Revenue | Revenue Generated |
Google Search & other | $40,359 million |
YouTube ads | $6,693 million |
Google Network | $7,496 million |
Google’s Other Services | $7,413 million |
Google Cloud | $7,454 million |
Other Bets | $288 million |
Hedging gains (losses) | $84 million |
Total | $69,787 million |
Now that we are aware of the ways Google makes money Let us take a detailed look at each source of income for Google.
Google Sources Of Revenue.
As per Oberlo, Google search and other properties were responsible for 58.1% of the money made by Google. At the same time, YouTube Ads and Google Network ads contributed 10.5% and 11.7% to Google’s revenue respectively.
Here is a detailed breakdown of the percentage of the money made by Google through various services in the fiscal year 2022.
Google Services | Percentage Of Revenue Generated. |
Google Search and other properties. | 58.1% |
Google Network Ads. | 11.7% |
YouTube Ads. | 10.5% |
Apps, hardware, and content | 10.4% |
Google Cloud | 9.4%. |
Let’s start digging into the money-making sources of Google by starting with Google Ads.
Google Ads
The primary source of income for Google is Google Ads. It generated a revenue of $54,548 million in the first quarter of 2023. Comparatively, in the fourth quarter of the year 2022, it generated a revenue of $59,042 million.
The following table displays the revenue generated by Google advertising over the past quarters.
Quarter | Revenue Generated By Google Advertising. |
Q1 2023 | $54,548 million |
Q4 2022 | $59,042 million |
Q3 2022 | $54,482 million |
Q2 2022 | $56,288 million |
Q1 2022 | $54,661 million |
According to the investor report of Google for the fiscal year 2022, it generated a revenue of $224.4 billion from Google advertising. Besides, the income made from Google advertisements from the years 2021 and 2022 was $209.4 billion and $146.9 billion, respectively.
The Google ads revenue includes the revenue generated from YouTube ads, Google Network, Google Search & other services.
To get a better insight and the money earned by Google from the advertisements, I have explained all three sources of advertisement revenue below.
Google Search And Others:
As of 2023, over 1 billion people use Google Search worldwide. It is no wonder that it generates a major part of its revenue from Google advertisements.
But how does Google make money from searches?
You might have used Google to search for a query you have, for an object you wish to purchase, or for a course you want to enroll in. The search results that appear at the top are usually advertisements. Google displays them with a Sponsored tag.
I searched for ‘Best Office Chairs,’ and Google displayed the following result. Most users interested in buying the chair are likelier to click on either of the ads displayed. And that’s how Google earns. It gets a few cents to over $50 for each click.
The ‘OTHERS’ here include Google Maps, Gmail, etc. You get to see advertisements on Google Maps when searching for places like restaurants, cake shops, etc. These advertisements also contribute to the pay-per-click revenue generation for Google.
YouTube Ads:
If YouTube creators want to earn money from YouTube, they can turn on the advertisement option for their videos. They have to give a portion of their revenue to YouTube. Plus, YouTube also runs ads on the videos of the channels that aren’t enrolled in the partner program.
As Google shares the YouTube ad revenue with the creators, it makes only 11% of its revenue through YouTube Ads. Marketers can choose between skippable or non-skippable ads. These ads appear before, after, or during the video.
Here is an example of the YouTube ad displayed right before the video starts. This is a skippable ad and can be skipped after some seconds.
As seen earlier, YouTube ads generated revenue of $6,693 in Q1 of the year 2023. Besides, it generated an income of $29.2 billion in the year 2022 and $ 28.8 billion in 2021.
Google Network Ads:
The third part of Google Ad revenue is Google Network Ads. It generated revenue of $32.7 billion in the year 2022.
In comparison, it contributed $31.7 billion in revenue in 2021 and $ 23.09 billion in 2020.
Google Network ads include Google Adsense, Google Ad Manager, and AdMob.
Here is a brief look at them:
Adsense:
Adsense has over 2 million customers. The approved publishers can enter their Google code into their videos, sites, etc., and the advertisers have to bid in the auction on their ads to show up their ads in the required slots.
If a website owner has placed a search ad on their website to earn per click, publishers get only 51% of the revenue from Adsense. However, if the publisher’s content is displayed on Google services through Adense, they get a 68% share of the revenue, and the rest goes to Google.
The Adsense revenue of Google Varies from category to category due to the competition witnessed in them. Let’s understand it with an example.
The Finance category has the potential to generate more revenue from advertising as compared to the arts and entertainment category. This means Google will also earn a good share of money in Finance category.
Google Ad Manager:
Google Ad Manager is a platform for large publishers with a significant amount of products in the inventory. They directly sell to the advertisers, and the platform supports ad exchange networks like Google Adsense, Google Ad Exchange, etc.
AdMob:
AdMob is a platform built by Google that helps app owners to display advertisements within their apps. These ads include the small banners that appear at the top or bottom of the app or a pop-up that usually appears between two levels of the games.
According to Google, more than a million advertisers are using AdMob, and more than a million apps display advertisements using the platform.
Google’s Other Services:
Google’s other service revenue includes money made by Google from Android, Chrome, Google Play, hardware, in-app purchases, online gaming, etc. It also includes the revenue received from subscriptions to YouTube Premium and YouTube TV.
Besides that, Google has launched various hardware solutions like Google Pixel, Laptops, tablets, earbuds, Google smart home products, and Chromecast digital media players. It also has launched various Fitbits and different types of game controllers.
Next comes the Google Play Store. There are various in-app purchases in the Google Play store, and a few of them are as follows.
Purchase | Price |
Play Pass | $4.99 per month or$29.99 per year. |
Apps. | $0 to $14.99 per month |
For developers. | $25 for uploading their first app. |
YouTube Premium is available for $11.99 per month. Users can subscribe to the premium plan to go ad-free. It contributes to the generation of almost $600 million in revenue. Plus, YouTube TV costs users $64.99 per month for unlimited access to 85 television channels.
After researching the detailed revenue, I found that these services contributed a small but valuable percentage to Google’s income. They led to a revenue generation of $7,413 million in the first quarter of the year 2023. While in the fourth quarter of the year 2022, they generated a revenue of $8,796 million.
The following table displays the revenue earned by Google through the hardware, app, and other services in the past quarters.
Quarter | Revenue Generated by Other Google Services. |
Q1 2023 | $7,413 million |
Q4 2022 | $8,796 million |
Q3 2022 | $6,895 million |
Q2 2022 | $6,553 million |
Q1 2022 | $6,811 million |
Google Cloud
I can bet that you must have used Google Cloud atleast once in your lifetime to store documents, photos, contacts, etc. However, some professionals require ample storage in Google Cloud to securely store all the digital copies of the documents.
The free services of Cloud storage offer limited functionalities. Hence, users must pay $ 0.020 per GB of storage per month. Users are also charged for network and operational costs according to the class of operations. Class A users must pay $0.005 per 10,000 operations. At the same time, Class B users must pay $0.0004 per 10,000 operations. For further pricing details, check out The Google Cloud Pricing page.
Google Cloud generated a revenue of $7,454 million in the Q1 of the year 2023. Besides, in the year 2022, Google made $26,280 million with the help of Google Cloud.
The following table displays the money made by Google through Google Cloud over the past Quarters.
Quarter | Revenue Generated by Google Cloud. |
Q1 2023 | $7,454 million |
Q4 2022 | $7,315 million |
Q3 2022 | $6,868 million |
Q2 2022 | $6,276 million |
Q1 2022 | $5,821 million |
Other Bets
Other Bets of Google include the revenue generated by the acquisitions of the companies made by Google. A few examples of these companies include Nest, Fitbit, Socratic, Waymo, etc.
This revenue is generated primarily from selling health technology and internet services. Additionally, licensing, research, and development also help to generate revenue.
In the first quarter of the year 2021, Google made $288 million from other bets. While in the year 2022, Other bets contributed to the generation of $1,068 million in revenue.
Here are the details about the money made by Google through other bets over the past quarters.
Quarter | Revenue Generated by Other Bets of Google |
Q1 2023 | $288 million |
Q4 2022 | $226 million |
Q3 2022 | $209 million |
Q2 2022 | $193 million |
Q1 2022 | $440 million |
Revenue Generated By Google Worldwide
It would be no surprise that Google makes most of its money in the United States. In the first quarter of the year 2022, Google was able to generate a revenue of $ 32.864 billion in the United States. At the same time, it generated $ 21.078 billion in the EMEA region.
Here is a table displaying the revenue earned by Google in different parts of the world.
Region | Revenue Generated By Google In Q1 2023 |
United States | 32,864 million |
Europe, the Middle East, and Africa | $21,078 million |
East Asia, Southeast Asia, and Oceania | $11,681 million |
Other Americas | $4,080 million |
Hedging gains (losses) | $84 million |
Total | $69,787 million |
In the year 2022, Google made 48% of its money from the United States. At the same time, it generated 29% of its revenue from the EMEA (Europe, the Middle East, and Africa) region.
Comparatively, in 2021 and 2020, Google made 46% and 47% of its money from the United States.
The following table depicts the percentage of the money made by Google in different regions of the world.
Region | Percentage of Revenue Generated in 2022 | Percentage Of Revenue generated in 2021 | Percentage Of Revenue Generated in 2021 |
United States. | 48% | 46 % | 47 % |
Europe, the Middle East, and Africa. | 29% | 31% | 30% |
East Asia, Southeast Asia, and Oceania. | 16% | 18% | 18% |
Other Americas. | 6% | 5% | 5 % |
Hedging gains (losses) | 1% | 0% | 0% |
Summary of the Revenue generated by Google over the past years.
Here is a summary of the money earned by Google through various sources over the past years.
Services | 2020 | 2021 | 2022 |
Google Search & other | $104,062 million | $148,951 million | $162,450 million |
YouTube ads | $19,772 million | $28,845 million | $29,243 million |
Google Network | $23,090 million | $31,701 million | $32,780 million |
Google Other | $21,711 million | $28,032 million | $29,055 million |
Google Cloud | $13,059 million | $19,206 million | $26,280 million |
Other Bets | $657 million | $753 million | $1,068 million |
Hedging gains (losses) | $176 million | $149 million | $1,960 million |
Total revenues | $182,527 million | $257,637 million | $282,836 million |
Here is a summary of the money made by Google in different parts of the world over the past years.
Region | Revenue Generated in 2022. | Revenue Generated in 2021. | Revenue Generated in 2020. |
United States. | $134,814 million | $117,854 million | $85,014 million |
Europe, the Middle East, and Africa. | $82,062 million | $79,107 million | $55,370 million |
East Asia, Southeast Asia, and Oceania. | $47,024 million | $46,123 million | $32,550 million |
Other Americas. | $16,976 million | $14,404 million | $9,417 million |
Hedging gains (losses) | $1,960 million | $149 million | $176 million |
Total | $282,836 million | $257,637 million | $182,527 million |
Related Read:
Conclusion: How does Google Make Money (2024)
That’s how Google makes billions of dollars every year.
Although most of the income is generated from advertising, other services of Google also play a major role in its profits. The revenue of Google is expected to increase with the increased use of digitalization in the upcoming years.
Besides, it will be interesting to see how Google grows its source of income and finds other new ways to make more money.
I hope the above article has helped you to discover the way Google earns money. For other articles related to Google, you can check out our website.
Sources:
FAQs
Google earns most of its income from the finance and insurance industries. They pay Google $43 per click on average for industry-related keywords.
Google makes $0.44 billion per day. This huge income is generated due to the millions of people searching for something across Google. Moreover, this number is expected to grow rapidly in the upcoming years.
Google is one of the largest companies worldwide. It is recorded to be the third most valuable brand in the world. More than 80% of its income is generated through advertisements, and the rest comes from Google Search, YouTube Ads, and Network Members’ sites.