Top 5 Myths About Google, Inc.

Google offers a ridiculous number of online services. There's the flagship Google search engine, Gmail, Google Maps, Google Earth, Google News, Google Talk, Google Docs and Google Calendar, just to scratch the surface. Then there are popular Google-owned Web sites like YouTube, Picasa and Blogger. All of these services are absolutely free.

So, how does Google make money? Does it make money at all? Since Google's debut, a persistent rumor asserts that the company has no business model and therefore makes no profit. That's one seriously misguided myth.

In 2008, Google made nearly $22 billion [source: Google]. Ninety-seven percent of the company's revenue came from advertising. How did they pull this off? Google has developed two highly profitable advertising models: Google AdWords and Google AdSense.

AdWords are the advertisements that appear during Google searches above and beside the main search results. They're labeled as "Sponsored Links." Advertisers can use AdWords to write short text ads and tag them with keywords. Google then uses complicated algorithms to find the most relevant ads for certain Google searches.

The advertiser doesn't pay Google each time his or her ad is shown. He or she only pays when someone clicks on his or her ad. Click-through costs can be as low as 10 cents, so it's not a steep investment for advertisers. But for Google, all of those dimes add up quickly.

AdSense works in a similar way, but the text ads surface on non-Google Web sites. If you run a Web site and want to earn a little advertising revenue, you can sign up with AdSense. Google uses its algorithms to show pertinent ads to site visitors. Every time a visitor clicks on an ad, the advertiser pays Google 10 cents or $20, depending on the popularity of a particular keyword. Google then gives you, the Web site owner, a small slice of that fee.

Keep in mind that all of that revenue isn't pure profit: After a year of investment losses and general economic havoc, Google turned a profit of $4 billion in 2008. In the final quarter of 2008, however, it experienced its first-ever drop in quarterly profit [source: Liedtke].

What's the capital of Uruguay? Who was the first female NASA astronaut? What exactly is Newton's Second Law of Motion? Oh, that's easy! Google. Google. Google.

Believe it or not, there was a time when the world expected you to actually remember and analyze those dates, facts and other bits of highly forgettable information you were taught in high school. Now, instead of long-term memory and intelligence, we have a search box.

This idea raises a provocative question: Does Google really make us dumber or have we as a global society simply changed the definition of "smart?"

A recent article in The Atlantic Monthly points out that people have been blaming technology for our downwardly spiraling intelligence since day one. Socrates bemoaned the invention of the written word, saying it would cause humans to become forgetful [source: Carr]. The printing press sparked outcry over the democratization of knowledge and its degrading effect on religious belief.

The Internet also has its critics. Studies show that the Internet has caused some clear shifts in the way we process information [source: Rich]. In the online realm, skimming, link-jumping and other nonlinear reading is more common than digesting long sections of text, as we would in a book or magazine. Critics argue that our growing disinterest in reading longer passages of text means we can't think critically about a subject [source: Carr].

Defenders of the Internet make the opposite argument: Google has made us infinitely more intelligent by giving us instant access to all the world's collective knowledge [source: Grier]. They argue that Google is the smart solution to a technologically "dumb" and outdated library system [source: Polaine]. With Google, we can gather up-to-the-minute information from myriad sources with blazing speed.

In other words: Yes, we skim, but that isn't necessarily a bad thing.

Deep in the bowels of a climate-controlled, neon-lit server farm inside a nondescript Google data center in a nameless Arkansas industrial park lie gigabytes of information. This information paints a shockingly accurate picture of who you are, where you live and what you like to watch on YouTube. Sounds ominous, doesn't it?

It's all true: Google saves search queries associated with your Internet Protocol (IP) address for nine months [source: Privacy Rights Clearinghouse]. It uses software to scan Web e-mails for keywords. With a new cell phone service called Latitude, your friends (and Google) always know where you are. Even YouTube always seems to suggest videos that you actually want to watch. Creepy, huh?

Obviously, if Google has access to all of this information, it's using it in sinister ways. Not so fast: According to Google representatives, there's nothing personally identifiable about any of the data that Google saves and analyzes. Your search queries, for example, aren't your actual search queries, but searches done from your computer's IP address. An IP address only gives Google a vague geographic location, not a name.

No Google employee is allowed to make connections between IP addresses and individuals. In fact, Google has a history of denying requests from the U.S. government to hand over search histories for investigations [source: Boggan].

The most diabolical thing that Google does with its vast stores of information is using your search history and e-mail keywords to effectively cater online advertisements to your interests. However, privacy advocates argue that no single entity should be allowed to collect this much information. They're concerned that hackers could get their hands on it or Google might finally fold to a government subpoena. What if Google suddenly needs to turn a quick buck -- what's stopping the company from selling our info to the highest bidder?

The answer, according to Google, is corporate philosophy number six: "You can make money without doing evil" [source: Google].

There is something undeniably Orwellian about Google Earth. Type in your home address and the camera swoops down from the stratosphere to display a clear aerial shot of your house. Zoom in closer and you can make out the pink rhododendron on your front lawn and your car in the driveway.

You half expect to zoom into the living room window and see yourself sitting at your computer. Wave to the camera!

The myth about Google Earth is that it's the world's most powerful real-time spy camera. The truth is that every image you see on Google Earth is an average of one to three years old [source: Google Earth]. Google collects and composites images from satellite and aerial imaging companies like DigitalGlobe and Tele Atlas, as well as from government agencies and the armed forces.

So yes, it's possible to get caught on camera by Google Earth, but that would take an incredible amount of luck.

The "Street View" option on Google Maps has also come under fire from privacy advocates who believe it also functions as a spy camera. But once again, the images are only updated once every few years. Plus, Google has devised a face-blurring algorithm to protect the anonymity of folks accidentally captured on camera [source: Rosenblatt].

When Google buys something -- like YouTube -- it usually makes front-page news. That's why some Google watchers are intrigued by the company's extremely quiet purchase of miles and miles of dark fiber.

Dark fiber is high-speed fiber-optic networking cable that hasn't been switched on yet. Insiders say Google owns more dark fiber than any other organization in the world [source: Cringely].

What could a company like Google do with all of that extra wire? The short answer: It could actually hijack the Internet.

This is the doomsday scenario proposed by technology writer and columnist Robert X. Cringely. As more and more people use the Internet to download movies, TV shows, music and other media, Internet service providers (ISPs) will struggle to meet the increased bandwidth demands. Google, meanwhile, will use all of that dark fiber to build its own faster, more efficient version of the Internet. When ISPs reach their capacity, they will have no option but to route all of their traffic through Google.

"We won't know if we're accessing the Internet or Google and for all practical purposes it won't matter," Cringely wrote in 2007. "Google will become our phone company, our cable company, our stereo system and our digital video recorder" [source: Cringely].

Google representatives have a slightly less dramatic explanation for the dark fiber purchases. They simply want to use it to interconnect data centers located around the globe.

Google also partners with telecommunications companies like AT&T to borrow bandwidth on their nationwide networks. To make these arrangements work, Google has to route a lot of its traffic to specific remote "peering" locations [source: Sullivan]. That requires a lot of extra networking fiber as well.

"You see an article in the New York Times about how AT&T has bought more fiber, and their stock goes up," Google's Chris Sacca said in 2006. "Then there is the same article over here about how Google bought some fiber, and it's like 'Google is trying to take over the world.'" That doesn't seem to be the case -- at present.

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