Tag Archives: revenue

Google Behind the Numbers

An interesting infographic pertaining to Google was posted over at Business MBA titled Google Behind the Numbers.  It’s a look at the revenue that Google collects and sources from which it comes.  The numbers are mind-boggling.

In 2010 Google’s revenue was $29.3 billion, more than the 28 poorest countries COMBINED!  Did you know that 97% of Google’s revenue comes from ads?  We knew that was their main business, but with all of the services it seems stunning that such a high percentage still comes from advertising.  Then again, the vast majority of those services, like Gmail, Docs, Maps, Calendar, and Music, are free.  All are monetized by displaying Google AdWords.

The massive numbers continue – displaying the amount of visitors, the time spent on Google sites, the power used, and more.  Scroll down through the infographic below and you’ll be amazed by the scale of this company that is barely a decade old.

Google Behind The Numbers
From: BusinessMBA.org

The Plan to Fix the Internet

Fellow Ohana, although it might be a highly optimistic claim I believe I might have the beginnings of an idea to save the Internet from itself.  The audacious goals of this plan are to

  1. Ensure users get the value they pay for
  2. Reward contributors for the value they provide
  3. Give incentive for quality without blocking freedom to post anything
  4. Provide incentives to make the Internet faster and more efficient

internet_mapIn this post I want to lay out the basics of this plan to see what you think and gauge the reaction.  If we think it will work we can take the Ohana Internet Plan (OIP) to the world, and think up a title with a cooler acronym.  Bear in mind that this is a rough outline of an early stage idea, so feel free to rip it to shreds.  Just let me know what you like about it as well.

I have been thinking about two seemingly seperate problems with the Internet recently, which I have talked about in previous posts here on GNC.

  1. Metered Internet is essentially looking inevitable, so if we have little chance of stopping it how can we turn it more to the advantage of users than the ISPs currently plan?
  2. How can contributors of quality content claim the fair value?  Without them the Internet ceases to be but they struggle to attract direct revenue, and advertising is a flawed revenue model.

It has occurred to me that these two problems could have the same solution.  Metered Internet that credits you for uploads.

The credit rate would of course have to be lower than the download rate otherwise there is no profit for anyone.  The difference in rate would be largest at the edge and smallest at the backbone.  The broad results would be:

  • It’s always profitable to forward traffic.  Net Neutrality solved.
  • The more traffic an ISP forwards the better for them.  Incentive to build fatter pipes.
  • The more traffic the ISP can keep off the backbone the better for them.  Drive for better efficiency.
  • Popular content will receive revenue for it.  Rewards for producing good content and less crappy advertising.
  • The return is better the closer your content is to the backbone.  An incentive for aggregators like YouTube to offer to content producers to host their content.
  • Higher definition content is worth more to producer and consumer.  If rich content is valuable to your viewers it is worthwhile to produce it in a variety of qualities and let them self select.

Some example numbers, using nice round ones for ease so lets not get too hung up on the value.  Lets say that the base rate for a 10GB chunk of data is set to $1.00, this is the rate at the backbone to transfer data from one place to another.  In order to get the money to maintain and improve itself it charges $1.01 to the destination of a chunk and pays $0.99 to the originator.  For every chunk it transfers it makes $0.02.

Next is the wholesale ISP that connects to the backbone.  It has wholesale supply deals with local ISPs (we are using a simple model here).  It charges $1.30 per chunk and pays out $0.70.  Whichever way the data flows to the backbone the wholesaler makes $0.29.  If it can get information from the source to the destination without touching the backbone it gets more than double, $0.60.

The local ISP provides the service to your home.  It charges $1.60 per chunk per download and pays $0.40 per upload.  This company then makes $0.30 for each chunk regardless of which way it goes.

A key point to all this is that everything that you upload someone else must agree to download.  This not only rewards people directly for a valuable contribution, but also will cause limits to rubbish.  Most sites are going to charge to accept your content with a share in the payments back to you if it gets downloaded.  And that share will have to be substantial to attract you to post your content to them rather than host it yourself.

In regards to general internet surfing this plan would have little effect.  For text based content the incremental cost would be small enough to be insignificant unless you attracted an very large readership.  And I truly believe that a metered Internet would end up costing us a lot less than ‘unlimited’ plans cost.

The problems I can see already:

  • This cannot happen without Government backing
  • Spam, do you want to pay to receive it and the originator could get a return for sending it.
  • Calculating what the actual rates should be is difficult
  • It will require a metering method that people can trust as accurate

So let me know what you think.  Remember that perfect is not the goal, we are striving for better and fairer than what we have now.

Image sourced from Matt Britt under Creative Commons 2.5