The best things in the world come for free and this statement holds true in case of Google. If i was asked to name a company which has completely exploited the potential of the word “Free” is would be Google.

I come across people asking questions, if Google offers everything for free how does it make money? Here is how it makes money.

• Gmail – The leading email service provider is absolutely free and provides a hefty storage space of about 7 Gigabyte. One of the ways how Google is making money is advertising. Sidebars are full of ads which are related to the Email content you get.
  

  Gmail Sidebar Ads

  7 Gigabyte may be enough for many users, but for few it’s not working till it’s unlimited. Whatever it maybe but Google charges you for adding additional storage to your gmail account.

  

  Purchase Additional Storage

  The additional storage business is quite profitable because once, you’ve gotten yourself an account you probably won’t take the hassles of shifting to another email service provider.

• Google Search – The main source of income for Google is Google Search. It is the most powerful product on the web after-all there is some reason why 451,258,500,123 searches are performed about every year and the money spent on advertising on Google is about $ 496,200,572,146. Every Query you do would surely eat away dollars from the advertisers pocket.
  Sponsored links form the best methods of income via Google search. The reason why this advertising worked is because it was targeted. When someone is researching to buy a Television and is finding reviews and comes across an Advertisement which attracts the customer due to a huge discount on the product and hence makes a sale. Did you know that the I am Feeling lucky button costed Google Millions of Dollars, not because it was a huge technological invention but it redirects users who made a search on Google to the First result without the users having to encounter with the Google’s result page which contains advertisements.
• Google Adsense and Google Adwords – A major portion of Google’s ad revenue comes from Publishers who monetize their content using Google’s ad network. My dad used to tell me, How much can a man work? |……| This much? |…………..| This much? How much can he make others work for him? |…… No Limits. This is what exactly happens here. Google knows that revenues from search are not enough for them so it gives other publishers chance to join in their ad network where there is a mutual benefit. The publisher makes money and so does Google by taking commission from their payments. The Commission rate is not disclosed but it is surely enough to keep Google’s growth at its peak. Google Adwords is from where advertisers join their ad inventory and make payments and prepare advertising campaigns.
• Google Apps – When Organizations go online, they prefer to go Google. Why? It saves money and it actually is quite reliable in terms of service. Nearly all those who buy domains use Google Apps for Email, Chat etc. but the biggest drawback is that if you use free version of Google Apps, you don’t get support and that’s the reason why most companies go Premium and they have to pay like $50 per extra user!
• Picasa Albums – If you know, the Google limits it’s users to a limit of only 1 Gb Upload space on their picasa account. So if you want to continue once you cross the limits, you might want ti buy additional storage like $5 for 20Gb per year.
• Orkut – Social networking is on the rise, and in countries like India and Brazil, Orkut does rule the market, kind of. If your eyesight is good, you would have surely observed those advertisements on Orkut.
  

  Advertisements on Orkut

  Google makes decent amount of income from this, but now as it is significantly loosing large amounts of users to Facebook, it’s end maybe near if Google does not do something to revive it!

• Youtube – There a lot of arguments over this issue. Google is actually running YouTube in loss which is not a good sign for Google. To make up for loss and make actual profits Google is working very hard to monetize it.
  

  Youtube OverLay ads

  First of all the ads you see around YouTube.com are one source of income. The next way could come from partner companies who agree to promote their music, commercials, etc on YouTube. Adwords advertising for videos is also a source of income. Youtube has also experimented a lot with Overlay ads and it’s becoming quite a bit success.

• Shopping? Google Product search is what you might refer to and that is where money starts moving towards Google’s banks. As far as what we have learned, Google gets Referral Revenue by selling products via Google product search.
• Google Earth and Maps – Google Earth is the best software for Online Navigation. A lot of features included. But like nothing satisfies few people and they want more so they opt in for the Pro Version of Google Earth which costs $400 and they also offer enterprise solutions. Google Maps and other services are advertising supported and soon, you might be see new advertising which is actually local based advertising i.e if you search for local pizza store you come across ads from such stores on your map.