The Dollar Factory

How does Google make money from Blogger?

Someone made a post at the DP forum today asking the following,

Google offers lots of services like Blogger, Gmail, Google Docs, Picasa Web etc. i have all those but I have never seen ads being put on any of the pages.

I thought Internet companies earn from ads, but how come they are not displayed on any of these products yet they offer free storage space and bandwidth?

Is there any other way they earn from these products? If it is there then what is it?

I thought that I take a few minutes to respond to this question on my blog. Actually, I will focus on only the part that is asking about how Google is monetizing Blogger. A mistake that the poster is making is that at least Gmail is monetized using pay per click text ads; also, Google Docs is a very new and experimental service that is not at the point of offering itself to monetization and since Google has no immediate need to earn from this service, it can wait until it is a mature product capable of competing against office software offered primarily by Microsoft.

On that note, why did Google buy Blogger but never bothered to somehow monetize it?

First of all, Blogger already has the mechanism setup for AdSense revenue sharing with publishers. However, they never take a cut from publishers, i.e., the percentage is set to 0%.

Okay, so they don’t make money from revenue sharing or it looks like it. However, since Google bought Blogger, they do make money from AdSense revenue sharing with publishers. How does that work, you ask?

First, Blogger is a platform that allows anyone to become a Web publisher regardless of their technical background. Second, Google makes it easy for these publishers to obtain an AdSense account. In fact, if you want to practically guarantee getting an AdSense account then start a Blogger blog and run it for a couple of weeks (as in post new content for a few days) and then apply for an account; chances are that you will be approved.

So, Blogger makes it easy to create and manage a blog and Google’s advertising program makes it easy to monetize it. We all know that Google takes a percentage of the money paid by an advertiser per click. So, they get a cut from the publisher’s AdSense earnings. Before Blogger was part of Google, they would have to have a revenue sharing system over the profits given to publishers from AdSense. Now, however, that Google owns Blogger, they receive a cut directly from what the advertisers are paying; at the same time, Google has access to a vast network of blogs that are generating fresh content for their advertisers.

This is how Google is making money from Blogger.