As Google has expanded its services far beyond the search engine, I've sometimes asked myself, "How can they possibly make money on this?" For example, I use Google Maps on my Blackberry all the time. It has no advertisements and, therefore, no capacity to generate income for Google.
Except...at some point, I had to get on the Web to find and then download the program. And at that point I'm sure I did see advertisements, and possibly even clicked through on one or two. Also, Google undoubtedly made note of the fact that someone at my IP address owned a Blackberry with GPS and was interested in mobile mapping software. Presumably, that information can be used to target me for particular ads.
And that, from what I gather, is Google's strategy: Get you onto the Web as often as possible and learn as much about you as possible, and then hit you with ads for products and services that are of maximum interest to you.
Consider another example (stolen from PC World or PC Mag; can't remember which). I use the Google Docs online spreadsheet program. As with Google Maps on my Blackberry, the online spreadsheets have no advertisements. Again, though, I had to get on the Web to find the spreadsheet program in the first place. I'm also filling out spreadsheets online with information that tells Google a little more about me. Furthermore, in response to Google's online document functionality, Microsoft has announced that it will be offering a scaled-down version of its Office suite online. This means even more people on the Web, seeing more advertisements and providing more information about themselves.
All of this plays into Google's business model. Clever fellows.
Footnote: I think you can also see why Google and Microsoft are considered "enemies," even though at first blush this doesn't make much intuitive sense. After all, one is a search engine company (or, more broadly, an information management company) and the other is a software company. They're not even competitors, right?
I suppose that's true to the extent that there's not much overlap between Google's core products/services and Microsoft's. But what Microsoft wants is for you to run their software locally, that is, off of your own computer or a server to which your computer connects. If you do that, Microsoft makes money. Google, on the other hand, wants you to do everything "in the cloud," that is, access all of your computer software and services through the Web. If you do that, Google makes money. You can see the conflict there...
Anklenote: Is Yahoo still in business? I almost never hear about them doing anything interesting or innovative.