The Secret To Google's Success

Everybody knows that Google Inc.'s innovations in search technology made it the No. 1 search engine. But Google didn't make money until it started auctioning ads that appear alongside the search results. Advertising today accounts for 99% of the revenue of a company whose market capitalization now tops $100 billion.

Now, research is showing that Google's auction methodology, invented internally and so important for its success, is far more innovative than auction experts once believed. While superficially similar to earlier types of auctions, it is a "novel mechanism" that "emerged in the wild," write the authors of The High Price of Internet Keyword Auctions, a new study by Benjamin Edelman of Harvard University, Michael Ostrovsky of Stanford University, and Michael Schwarz of the University of California at Berkeley. Google's AdWords became so successful after its debut four years ago that some of its key features were quickly adopted by Yahoo! Inc., then the search-ad leader. The Secret To Google's Success

Linked by shanmuga Monday, 27th February 2006 6:03AM