It sticks ads all over. But to maintain growth, it may need to own the places it puts themThe eternal story line in media is "Google (GOOG) is moving into [fill in the blank]." In recent weeks, Google announced its Android operating system for mobile phones and its OpenSocial standard, which will link applications across major social-networking sites, so long as (for now, at least) they're not named Facebook. As several blogs discovered, in November the company filed a patent application for a Google magazine of sorts, which would allow users to collate Web content around which Google would wrap targeted ads. It's also launching a job ads initiative.
All of which multiplies the number of arenas into which Google can sell advertising, which provides 99% of its revenue. The formula is familiar: Sell ads, in many cases around content Google doesn't own; turn over the bulk of that revenue to the owner of the content; repeat until the end of time.
Google's revenues almost tripled, to $11.8 billion, in the first nine months of '07, so it's hard to argue with its approach. But, really, how long can this go on? Not even the most ardent Google apologist claims its profits will balloon by the billion forever. Some perched in lofty places throughout the media biosphere advance a quietly radical notion: Google will start buying content companies. In fact, they say, Google will have no choice.
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