Sunday, July 19, 2009

Companies Tony Loves: Google

This week's edition of Companies Tony Loves is a follow up on an old post entitled Google: a study in economics (initially published on 23 April 2009). Here is an excerpt from the original post:

Like everything else that Google does, Google is incredibly good at placing targeted ads in unobtrusive places. If you do a Google search for "Houseplant," eight advertisements regarding where you can buy houseplants appear next to your search results. There's even a sponsored link to a professional agency that provides advice regarding how to care for houseplants.

What's smart about this? By conducting the search, you told Google that you want to know something about houseplants. Google provided you with good information (see search results), but Google also provided those who profit from selling houseplants access to your eyes. That's a service worth paying for, and companies do pay Google for it.

There's Google's cash cow. Back to my ads on this blog. I never told Google what ads to place, but the ads are mysteriously on point. I blogged about our houseplant, "Bob." Google placed houseplant ads. I blogged about unions and academic research. Google linked my readers to something called "Labor Unions Research." Someone at Google wrote a very innovative computer program.

Now, that's targeted advertising and its success is a testament to Google's vision. For now, just enjoy the many services Google provides and give thanks to "the invisible hand" for bringing Google to the market.

Google continues to create value by developing new applications and tools. This value is the result of hard work. Yes, Google makes billions annually, but they make this money by creating even more value. For this reason, I still think we should thank the invisible hand; it's a good reason to appreciate Google.

Next week's edition of Companies Tony Loves will feature a company I have not mentioned on this blog before: Young House Love. Check them out. If you have suggestions for why I should love them, I'd love to hear your thoughts. I might even incorporate them into my post.

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