Where does all the money go?

Discussion in 'Website Development & Design' started by andrea123, Aug 8, 2008.

  1. andrea123

    andrea123
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    I love reading about how all these virtual enterprises spend millions of dollars developing X or Y tools for greater efficiency but how is this spent? It sounds like a lot of money to me, and probably it is. But what do they spend all this money in? I know this probably has already been asked before but I’m still curious. I don’t have access to millions of dollars, so does that mean I won’t be as successful as Google?
     
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  2. Fergal

    Fergal
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    Very good question Andrea, I've often wondered about this myself.
    I don't know for sure but my opinion is that in order to become popular and reap the benefits of viral marketing you have to be the best. Being the best doesn't come cheap and it doesn't come quickly. You need the best people and the best technology.

    To use your Google example. There are lots of search engines that use a purchased or even a free script on nicely designed sites on shared hosting accounts. These sites can be successful and make a nice return for their owners.

    Google in comparison own their own servers, which are custom built to make them as fast and as cost efficient as possible. This allows them to display search engine results much quicker to their users. Their search engine technology is obviously custom designed and built, which ensures that their search engine results are better than everyone else's. All of this makes Google the best, the most popular, the most talked about and the most profitable search engine. However, the obvious difference in cost base between Google and the low cost search engine or directory is huge.

    I hope not. Obviously it is difficult to compete directly with huge well funded players. However, every business has to start somewhere and everyone has the opportunity to start small, secure funding and then compete with the majors. One way of doing this is by focusing on a very specific niche and growing from their. E.g. you could start a search engine / directory for your home town. Just make sure that it is the best directory for your town :)

    Another major cost for these companies is marketing. Even companies that have a viral approach and don't spend on direct advertising will often have a large marketing budget. This money is spent on PR staff and agencies and on other activities designed to get them noticed, e.g. sponsorship.

    I'd love to hear the views of other members, on this topic.
     

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