Google’s products and services are free, for the most part. Anyone with internet access can log in to Google’s search engine, Google maps or Gmail at no cost to themselves. Google’s new internet browser, Google Chrome, is also a free download. One example of a product that Google charges the public for is Google Earth Pro, selling for $399 (Retrieved from http://support.google.com/earth/bin/answer.py?hl=en&answer=21406 August 27, 2012). Another item that customers get charged for is Google Apps for Business, which can be purchased for $5 a month or $10 a month. (Retrieved from http://www.google.com/enterprise/apps/business/pricing.html August 31, 2012). For the most part, however, their products are free to the public.
Some of Google’s fixed costs are the mortgage/rental costs of their offices, insurance costs, and licensing and fees for their software/web pages. Also, the labour costs of salaried, upper level employees would likely be fixed as well. Some variable costs would be labour (especially in positions with higher turnover), utilities for the buildings, and marketing costs.
According to Google, 96% of their revenue is generated from their advertisers. The below information comes from their financial statements on the SEC website:
(Retrieved from http://sec.gov/Archives/edgar/data/1288776/000119312512025336/d260164d10k.htm August 31, 2012).
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