Googled Read Free

company’s algorithms not only rank those links that generate the most traffic, and therefore are presumed to be more reliable, they also assign a slightly higher qualitative ranking to more reliable sources—like, for instance, a New York Times story. By mapping how many people click on a link, or found it interesting enough to link to, Google determines whether the link is “relevant” and assigns it a value. This quantified value is known as PageRank, after Larry Page.
    All this was interesting enough, but where the Google executives really got Karmazin’s attention was when they described the company’s advertising business, which accounted for almost all its revenues. Google offered to advertisers a program called AdWords, which allowed potential advertisers to bid to place small text ads next to the results for key search words. Nike and Adidas might, for example, vie for ad space adjacent to keywords such as sneakers or basketball. All auctions for ads are run online, through an automated system. The highest bidder gets to place a small text ad appearing at the top of a gray box to the right of the search results; up to ten lower bidders win ad space below the coveted top listing. The minimum bid per keyword is set by Google. A commonly searched word or phrase like eBay or Jet Blue might cost only a penny or two, while a more esoteric phrase like helicopter parts might fetch fifty dollars per click. In a second advertising program, AdSense, Google served as a matchmaker, marrying advertisers with Web destinations. If Intel wanted to advertise on technology blogs or a hotel in London wanted to promote itself on travel sites, Google put them together via a similar automated system. In both auctions, there were no ad reps, no negotiations, no relationships. Unlike the ads Karmazin and traditional media had sold for more than a century based on the estimated number of people reading a newspaper or watching a program (called CPMs, or cost per thousand viewers), Google’s system (CPC, or cost per click) ensured that advertisers were charged only when the user clicked on an ad.
    It was Google’s ambition, Schmidt and Page and Brin liked to say, to provide an answer to the adman’s legendary line “I know half of my advertising works, I just don’t know which half.” To help them sort through the digital clicks, Google and other new media companies relied on what are called cookies, software files that reside on a user’s browser and keep track of their activities online: search questions asked, Web pages visited, time spent on each Web page, advertisements clicked on, items purchased. Because of these cookies, Google’s searches improve with use, as they become more familiar with the kind of information the user seeks. Although the cookie doesn’t identify the user by name or address, it does assemble data advertisers crave and couldn’t get from traditional media companies like Karmazin’s.
    And unlike traditional analog media companies, which can’t measure the effectiveness of their advertising, Google offered each advertiser a free tool: Google Analytics, which allowed the advertiser to track day by day, hour by hour, the number of clicks and sales, the traffic produced by the keywords chosen, the conversion rate from click to sale—in sum, the overall effectiveness of an ad.
    Thus, the several hundred million daily searches Google performed in 2003 (today the number is 3 billion) provided a tantalizing trove of data. Google helped advertisers target consumers not just by age, sex, income, profession, or zip code, but by personal preferences for leisure time activities, frequently visited locations, product preferences, news preferences, etcetera. Google took much of the guessing out of advertising. “Our business is highly measurable,” Schmidt said. “We know that if you spend X dollars on ads, you’ll get Y dollars in revenues per industry, per customer.”
    Karmazin was aghast. Most of the