How the Behemoths of the Web make their money

What are the largest websites globally?

The data analytics website Alexa reveals that the top 10 in order are as follows:

  1. Google.com
  2. YouTube.com
  3. Facebook.com
  4. Baidu.com
  5. Yahoo.com
  6. Amazon.com
  7. Wikipedia.org
  8. Qq.com
  9. Google.co.in
  10. Twitter.com

Unsurprisingly, Google takes the top spot. Compete, another data analytics firm, reveals that in March 2016 alone the Google domain had a total of 186,085,474 unique visitors.

google.png

Source: Compete

For the uninformed, #4 (Baidu.com) and #7 (Qq.com) are web services based out of China, while #9 (Google.co.in) is Google’s Indian search engine.

There are a variety website types present on the list. What are the similarities between them? Answering this question may be useful in beginning to determine why particular websites favor one way of generating profit over another.

website

 

Search Engine was the most popular category for the top 10 websites.

table

In the table above, I did an analysis of some of these websites. Stats included:

  • Total Revenue
  • Ad Revenue
  • Average Monthly Ad Revenue
  • Percentage of Revenue from ads
  • Average number of monthly visitors
  • Ad Revenue to Visitor Ratio

Unsurprisingly, Google and Amazon had the highest revenues for FY 2015. Google’s Ad Revenue to Visitor Ratio was also extremely high at 2.26. This essentially means that Google made 2.26 the amount of money compared to how money visitors they received per year.

chart 4

The results show that Amazon had the lowest Ad Revenue to Visitor Ratio, which is unsurprising consider they are primarily a retailer.

In my opinion, the most surprising piece of data derived from the chart is the fact that Facebook came in second for the highest ratio. Facebook had a 1.76 ratio. Their ad revenue total was 1.76 times higher than their average monthly visitor count for FY 2015.

Google and Yahoo, both Search Engines, generate the majority of their revenue through advertising (~70% and ~92%).


Overall, sponsored ads in search engines (either directly or in social media) appear to give the biggest payoff based on the data.

BuzzFeed and the Difficulties of Branded Ad Content

The digital native news site BuzzFeed is in trouble, as illustrated by a trending topic on Twitter.

The Financial Times reported an alarming statistic as revealed by the company.

Buzzfeed, until now the genre’s gold standard, had halved its 2016 revenue projections from $500m to $250m, after making $150m in 2015, 30% lower than expected.

Multiple articles found linked in the tweets above talk about the difficulties in terms of generating revenue from advertising.

Marketing Dive states:

BuzzFeed takes a different approach than most publishers with its distributed content strategy, such as the content specifically created for Facebook and Snapchat. Where most publishers earn revenue from website ads, 75% of BuzzFeed’s content never appears on its website.

 

Twitter users seem to be reflecting a common opinion associated with the debacle – branded ad content is too labor intensive for a large and growing company.

The situation may be a reflection of a changing economy. Surely this will have implications for future digital startups in their aim to generate a reliable source of web revenue.

Amazon’s Staggering Success

This video from BuzzFeed presents 12 interesting facts about Amazon, the e-commerce giant.

There are some shocking statistics shared in the video, including the fact that Amazon’s warehouses have more square footage than 700 Madison Square Gardens!

Amazon is a good example to start off the investigation into websites and their revenue. Last year, Amazon reported on their Corporate Press site the financials for the 2015 Fiscal Year.

Net sales increased 20% to $107.0 billion, compared with $89.0 billion in 2014. Excluding the $5.2 billion unfavorable impact
from year-over-year changes in foreign exchange rates throughout the year, net sales increased 26% compared with 2014.

Amazon, like other top websites, is attaining an increasing presence online as more people acquire Internet access.

The question that many may ask remains. How does Amazon do it? They offer extremely cheap prices and keep their customers satisfied.

Amazon has a specific way of generating web revenue, not unlike Google or even Facebook.

Introduction

Hi all. This is a blog created for the COMM 280 Class at Drury University. The primary purpose is to gain a better understanding of data visualization through research, compilation, and publishing in a web environment.

For this project, I have chosen to examine the relationship between the most-visited websites and how they generate revenue. I feel that this has the potential to be an engaging topic.

Every week I will update the blog with a new post detailing further advances I’ve gained into the research. Stay tuned for updates!

Max Prater, 2016.