How Does Google Make Money?
As a leading tech company, Google’s role in ecommerce is immense. Whether you’re a business owner optimizing your online store to cater to the world’s largest search engine or a shopper discovering new products, Google is bound to feature in your journey.
But how does Google make money?
With Google’s ad revenues in the billions and rising year after year, it’s clear that ads are one of the company’s biggest revenue sources. But that’s not the only way it makes money. Here’s a look at Google’s top revenue streams.
Google revenue breakdown: top Google revenue sources in 2023
- Ads
- Ads (Google Search & other properties): $175.03 billion (56.9%)
- YouTube ads: $31.51 billion (10.3%)
- Google Network ads: $31.31 billion (10.2%)
- Google subscriptions, platforms, and devices: $34.69 billion (11.3%)
- Google Cloud: $33.09 billion (10.8%)
- Other bets: $1.53 billion (0.5%)
- Hedging gains: $236 million (0.1%)
Source: Google’s 2023 financial report
How does Google make money: 2023 overview
- Google generated $307.39 billion in revenues in 2023.
- More than three-quarters of its revenues in 2023 came from ads (search, YouTube, and Google Network).
- Revenues from YouTube ads rose by 7.8% year on year, while revenues from Google Network ads fell by 4.5%.
Top Google revenue sources: search, YouTube, and Google Network ads
According to Google's 2023 earnings report, Google’s top revenue source in 2023 was ads. Of the $307.39 billion in revenue the company brought in, a whopping $237.86 billion came from ads. Google generates its ad revenues from three main streams:
- Ads on its search engine results page and other products (including Gmail, Google Maps, and Google Play): $175.03 billion (56.9%)
- YouTube ads: $31.51 billion (10.3%)
- Google Network ads (includes ads on Google’s partner sites): $31.31 billion (10.2%)
This Google revenue breakdown shows ads made up the large majority—or 77.4%—of its total revenue worldwide last year. This is no surprise, as ads have been Google’s largest source of income for years.
Other Google revenue sources: subscriptions, Google Cloud, and other bets
Ads aside, subscriptions, platforms, and devices, as well as Google Cloud, are also among Google’s top revenue sources. Revenue from the company’s subscriptions, platforms, and devices hit $34.69 billion, contributing to 11.3% of the total. Meanwhile, Google Cloud was responsible for $33.09 billion, around 10.8% of the company’s 2023 revenues.
Google also generated revenue from other bets and hedges, totaling $1.53 billion and $236 million, respectively. However, these accounted for just 0.6% of its 2023 revenue.
Google revenue breakdown: top Google revenue sources in Q2 2024
- Ads
- Ads (Google Search & other properties): $48.51 billion (57.2%)
- YouTube ads: $8.66 billion (10.2%)
- Google Network ads: $7.44 billion (8.8%)
- Google subscriptions, platforms, and devices: $9.31 billion (12%)
- Google Cloud: $10.35 billion (12.2%)
- Other bets: $365 million (0.4%)
- Hedging gains: $102 million (0.1%)
Source: Google’s Q2 2024 financial report
The latest earnings report from Alphabet, Google’s parent company, shows that revenues from ads continue to rise year over year, driving Google’s revenue.
In Q2 2024, Google’s revenue totaled $84.74 billion, of which $64.62 billion (or 76.3%) was from ads. Revenue from search ads hit $48.51 billion, a 13.8% annual increase. Meanwhile, YouTube ads registered at $8.66 billion (10.2%), after rising 13% year on year, and Google Network ads fell by 5.2%, to $7.44 billion (8.8%).
As of September 2024, Google’s market cap remains higher than $2 trillion, a 15% increase from its value at the end of 2023.