The web advertising story
Well we all know how successful Google has been with their advertising models with majority of their revenue coming from their ad platform. While getting an AdSense account from Google for my blog, I decided to find out more about the way Pay-per-click and AdWords works.
Well, going through some Wikipedia articles, I got to the following story: "Google, Yahoo bury the legal hatchet". Apparently, Yahoo holds patents on both pay-per-click and keyword bidding systems and they sued Google over their advertising model. Google agreed to give Yahoo, 2.7 million shares of its stock to settle the issue and get a perpetual license to the patents. Interesting eh?
So when exactly did Yahoo file these patents? Well, turns out they didn't. The company behind patenting and making the web advertising model is Overture (formerly GoTo.com). Yahoo acquired them in 2003 for $1.7 billion. Looking at Google's share price today, it looks like a pretty good investment!
Google launched their advertising model in the year 2000. At this point, GoTo.com had already been in operation for 2 years with a similar model! And although Google is a household name today, they may never have made it without Overture's advertising model and the subsequent revenues they got from it.
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