Multi-sided platforMs patterns 81 platform management, managing services, expanding reach targeted ads free search monetizing content advertisers web surfers content owners search platform platform costs keyword auctions free KA VP CR CH CS KP KR R$ C$ targeted ads content owners content web surfers content advertisers content R$ monetizing content targeted ads free search monetizing targeted ads targeted ads keyword auctions free search monetizing content free search advertisers web surfers content owners keyword auctions advertisers keyword auctions As a multi-sided platform Google has a very distinct revenue model. It makes money from one Customer Segment, advertisers, while subsidizing free oΩers to two other segments: Web surfers and content owners. This is logi- cal because the more ads it displays to Web surfers, the more it earns from advertisers. Increased advertising earnings, in turn, motivates even more content owners to become AdSense partners. Advertisers don’t directly buy advertising space from Google. They bid on ad-related keywords associated with either search terms or content on third party Web sites. The bidding occurs through an AdWords auction service: the more popular a keyword, the more an advertiser has to pay for it. The substantial revenue that Google earns from AdWords allows it to continuously improve its free oΩers to search engine and AdSense users. Google’s Key Resource is its search platform, which powers three diΩerent services: Web search (Google.com), advertising (AdWords), and third-party content monetization (AdSense). These services are based on highly complex proprietary search and matchmaking algorithms supported by an extensive IT infrastructure. Google’s three Key Activities can be defi ned as follows: (1) building and maintaining the search infrastructure, (2) managing the three main services, and (3) promoting the platform to new users, content owners, and advertisers. targeted ads free search monetizing content advertisers web surfers content owners keyword auctions free VP CR CH CS KP KA KR R$ targeted ads content owners content web surfers content advertisers content R$ monetizing content targeted ads free search monetizing targeted ads targeted ads keyword auctions free search monetizing content free search advertisers web surfers content owners keyword auctions keyword auctions Google has one main Revenue Stream that subsidizes other oΩers (Revenue Stream is replaced by “free”) bmgen_final.indd 81 6/15/10 5:35 PM