Google was co-founded by Larry Page and Sergey Brin while they were students at Stanford University, and the company was first incorporated as a privately held company on September 7, 1998. Google’s initial public offering took place on August 19, 2004, raising USD1.67 billion, making it worth $23 billion. Through a series of new product developments, acquisitions and partnerships, the company has expanded its initial search and advertising business into other areas, including web-based email, online mapping, office productivity, and video sharing, among others.

Like most large corporations, Google’s businesses have drawn some controversy, such as copyright disputes in its book search project, or censorship by Google of search results as it works with countries such as France, Germany, and China. Additionally, in the post September 11 era, several governments have raised concerns about the security risks posed by geographic details provided by Google Earth’s satellite imaging.

Pay per click (PPC) is an advertising technique used on websites, advertising networks, and search engines.

Advertisers bid on “keywords” that they believe their target market (people they think would be interested in their offer) would type in the search bar when they are looking for their type of product or service. For example, if an advertiser sells red widgets, he/she would bid on the keyword “red widgets”, hoping a user would type those words in the search bar, see their ad, click on it and buy. These ads are called “sponsored links” or “sponsored ads” and appear next to and sometimes above the natural or organic results on the page. The advertiser pays only when the user clicks on the ad.

While many companies exist in this space, Google AdWords and Yahoo! Search Marketing, which was formerly Overture, are the largest network operators as of 2006. In the spring of 2006, MSN started beta testing their own in-house service, MSN adCenter. In recent years agencies have also arisen to facilitate the use of pay-per-click advertising, such as Latitude White in the UK, leading to refinements in the PPC keywords-matching system. Depending on the search engine, minimum prices per click start at US$0.01 (up to US$0.50). These prices can reach up to GBP£18+ per click for services such as unsecured personal loans. Very popular search terms can cost much more on popular engines. Arguably this advertising model may be open to abuse through click fraud, although recently Google and other search engines have implemented automated systems to guard against this.

Cost Per Action or CPA (as it is often initialized to) is a phrase often used in online advertising and online marketing circles.

CPA is considered the optimal form of buying online advertising from a direct response advertiser’s point of view. An advertiser only pays for the ad when an action has occurred. An action can be a product being purchased, a form being filled, etc. (The desired action to be performed is determined by the advertiser.) Google has incorporated this model into their Google AdSense offering while eBay has recently announced a similar pricing called AdContext.

A related term, eCPA or effective Cost Per Action, is used to measure the effectiveness of advertising inventory purchased (by the advertiser) via a CPC, CPM, or CPT basis.

Effective Cost Per Mille or eCPM (as it is often initialized to) is a phrase often used in online advertising and online marketing circles. It means the cost of every 1,000 ad impressions shown.

CPM is considered the optimal form of selling online advertising from the publisher’s point of view. A publisher gets paid every time an ad is shown.

eCPM is used to measure the effectiveness of a publisher’s inventory being sold (by the publisher) via a CPA, CPC, or CPT basis. In other words, the eCPM tells the publisher what they would have received if they sold the advertising inventory on a CPM basis (instead of a CPA, CPC, or CPT basis).

CPM Cost Per Mille or cost ‰ or Cost per thousand or cost per mille (abbreviated as CPT or, more commonly, CPM). In Latin mille means thousand, therefore, CPM means cost per thousand. CPM is a commonly used measurement in advertising. Radio, television, newspaper, magazine and online advertising can be purchased on the basis of what it costs to show the ad to one thousand viewers (CPM). It is used in marketing as a benchmark to calculate the relative cost of an advertising campaign or an ad message in a given medium. Rather than an absolute cost, CPM estimates the cost per 1000 views of the ad.

Click-through rate or CTR is a way of measuring the success of an online advertising campaign. A CTR is obtained by dividing the number of users who clicked on an ad on a web page by the number of times the ad was delivered (impressions). For example, if your banner ad was delivered 100 times (impressions delivered) and 1 person clicked on it (clicks recorded), then the resulting CTR would be 1%.

Banner ad click-through rates have fallen over time, often measuring significantly less than 1%. By selecting an appropriate advertising site with high affinity (e.g. a movie magazine for a movie advertisement), the same banner can achieve a substantially higher click-through rate. Personalized ads, unusual formats, and more obtrusive ads typically have higher click-through rates than standard banner ads.

AdSense is an ad serving program run by Google. Website owners can enroll in this program to enable text, image and, more recently, video advertisements on their sites. These ads are administered by Google and generate revenue on either a per-click or per-thousand-impressions basis. Google is also currently beta-testing a cost-per-action based service.

Google utilizes its search technology to serve ads based on website content, the user’s geographical location, and other factors. Those wanting to advertise with Google’s targeted ad system may sign up through AdWords. AdSense has become a popular method of placing advertising on a website because the ads are less intrusive than most banners, and the content of the ads is often relevant to the website.

It currently uses JavaScript code to incorporate the advertisements into a participating site. If it is included on a site which has not yet been crawled by the Mediabot, it will temporarily display advertisements for charitable causes known as public service announcements (PSAs). (Note that the Mediabot is a separate crawler from the Googlebot that maintains Google’s search index.)

AdWords is Google’s flagship advertising product, and main source of revenue. AdWords offers pay-per-click (PPC) advertising, and site-targeted advertising for both text and banner ads. The AdWords program includes local, national, and international distribution. Google’s text advertisements are short, consisting of one title line and two content text lines. Image ads can be one of several different Interactive Advertising Bureau (IAB) standard sizes.