Google AdSense

You may have noticed the Google AdSense ads to the right. In theory, if you click on any of the ads it sends some minor sum of money into my Google AdSense account. Bloggers with large readerships can apparently do pretty well with this program.

I signed up a while ago, mainly because I was interested in seeing what came up. I'm obviously not trying to make any money off of them (I don't even remember my login for their home page, or where it is) and I'd be quite shocked if they sent me a check even for fifty cents. But it is amusing to watch the ads customize themselves according to the content of my posts. I'm sure for "single issue" blogs this could be a very effective way to reach customers. If I were the leading blogger about bicycle technology, bike manufactures would wet themselves to reach my readers' eyeballs.

What's brilliant about Google's system is that the blogger himself does nothing but sign up. Once you've put the Google source code into your template Google's automated system does the rest. The advertiser pays only for clickthroughs, so it costs them nothing to have the ad up on my blog -- or anyone else's, for that matter -- unless they get a response. This is what enables a small company (a custom bike manufacturer, for instance) to get closely targeted results for very little money; like much of the Web, it helps level the playing field considerably.

With my blog, the ads range from magic themed to (now) gay-targeted ads. I'm sure by the time you read this there will be a bunch of hypnosis-related ads in their place. The power of the web to target both ads and information is being harnessed by Google like never before; it costs them virtually nothing to place an ad in every single location where it might be relevant. Since they only get paid if the ad gets a response, they have a huge incentive to continually improve their algorithms to increase their effectiveness. The benefit to you, the consumer, is that you don't have to read through a whole bunch of ads for products and services of no interest to you.

Maybe that's why Google is now trading, as of this writing, at $379/share. I read somewhere recently that uber-VC (venture capitalist) John Doerr invested $12.5 million of startup capital into Google, for which he received the pre-IPO equivalent of about 25,000,000 shares (at a then-theoretical price of 50 cents a share). I don't know if these numbers are exactly accurate, but if they're even close then Doerr (who previously invested in Amazon, Netscape, Sun Microsystems, Compac, Genentech, and just about every other major tech-related company of the last decade), with $12.5 million times roughly 760, is doing just fine.

And Google, by figuring out how to harness the extraordinary architecture of participation engendered by the web, is in fact changing the world.