By newdailyworld 
Management Team
When the management team at Google decided to take the company public in August 2004, they decided with the knowledge that being a publicly traded company would force them to open their doors to public scrutiny. Before their IPO, 18 months ago, Google was, for all intents and purposes, a shuttered shop from which light rarely leaked.
Now that Google stock circulates on the open market, US law requires it to file an annual report (Form 10-K) and quarterly reports (Form 10-Q) with the Securities and Exchange Commission (SEC). These reports are made available to the public by the SEC and can also be found in Google’s Investor Relations Center. As a result of these reports, Google is no longer able to hold a wealth of information about itself or its business as a secret.
Annual Report
Google’s 2005 Annual Report (Form 10-K) was filed yesterday, making it immediately available to the general public. Weighing in at 103 pages in 10-point font, the report contains a great deal of information about the business of being Google and offers a glimpse of how Google sees itself.
Some of the information contained in the report is trivial. For instance, did you know that Google leases approximately 1.3 million square feet of office space in Mountain View, California? It owns a further 644,000 square feet of building space near its Headquarters at 1600 Amphitheatre Parkway, Mountain View, California 94043.
The firm also leases office and research space in; Amsterdam, Ann Arbor, Atlanta, Bangalore, Beijing, Belo Horizonte, Boston, Cambridge, Chapel Hill, Chicago, Copenhagen, Dallas, Denver, Detroit, Dublin, Duesseldorf, Frankfurt, Hamburg, Hong Kong, Hyderabad, Irvine, Istanbul, Kirkland, London, Madrid, Melbourne, Mexico City, Milan, Montreal, Mountain View, Mumbai, Munich, New York, Oslo, Paris, Rome, Santa Monica, Sao Paolo, Seattle, Seoul, Shanghai, Stockholm, Sydney, Tel-Aviv, Tokyo, Toronto, Trondheim, Warsaw, Washington D.C. and Zurich. Its data centers are located in the United States, the EU, and Asia.
Annual Report
There is a fair amount of information in the report relevant to SEOs and other search marketers. Ten pages of the report are dedicated to detailing how the various facets of Google’s search engine work and how its cores function alongside each other. While it does not spell out the exact ranking formulas, a close read of the lengthy document is like a survey course in University. For some, it will be an education, for others, a reiteration of knowledge they already have.
Starting with a short description of the 33 unique search applications available from the Google Home and Services pages, the report offers details on most of the dozens of software products and packages Google offers. The report separates various tools and appliances into several categories in order to coherently present the vast array of search tools and features offered by Google.
On Organic (free) Search Listings
Our web search technology uses a combination of techniques to determine the importance of a web page independent of a particular search query and to determine the relevance of that page to a particular search query. We do not explain how we do ranking in great detail because some people try to manipulate our search results for their gain, rather than in an attempt to provide high-quality information to users.
Ranking Technology
One element of our technology for ranking web pages is called PageRank. While we developed much of our ranking technology after Google was formed, PageRank was developed at Stanford University with the involvement of our founders and was therefore published as research. Most of our current ranking technology is protected as a trade secret. PageRank is a query-independent technique for determining the importance of web pages by looking at the link structure of the web.
PageRank treats a link from web page A to web page B as a “vote” by page A in favor of page B. The PageRank of a page is the sum of the PageRank of the pages that link to it. The PageRank of a web page also depends on the importance (or PageRank) of the other web pages casting the votes. Votes cast by important web pages with high PageRank weigh more heavily and are more influential in deciding the PageRank of pages on the web.
Text-Matching Techniques
Our technology employs text-matching techniques that compare search queries with the content of web pages to help determine relevance. Our text-based scoring techniques do far more than count the number of times a search term appears on a web page. For example, our technology determines the proximity of individual search terms to each other on a given web page and prioritizes results that have the search terms near each other. Many other aspects of a page’s content are factored into the equation, as is the content of pages that link to the page in question. By combining query-independent measures such as PageRank with our text-matching techniques, we are able to deliver search results that are relevant to what people are trying to find.
On AdWords
We use the Google AdWords auction system to enable advertisers to automatically deliver relevant, targeted advertising. Every search query we process involves the automated execution of an auction, resulting in our advertising system often processing hundreds of millions of auctions per day. To determine whether an ad is relevant to a particular query, this system weighs an advertiser’s willingness to pay for prominence in the ad listings (the cost-per-click or cost-per-impression bid) and interest from users in the ad as measured by the click-through rate and other factors. Our Quality-based Bidding system also assigns minimum bids to advertiser keywords based on the Quality Scores of those keywords—the higher the Quality Score, the lower the minimum bid. The Quality Score is determined by an advertiser’s keyword clickthrough rate, the relevance of the ad text, historical keyword performance, the quality of the ad’s landing page, and other relevancy factors.
On How Google Charges Advertisers per Click
The AdWords auction system also incorporates the AdWords Discounter, which automatically lowers the amount advertisers pay to the minimum needed to maintain their ad position. Consider a situation where there are three advertisers – Pat, Betty, and Joe – each bidding on the same keyword for ads that will be displayed on Google.com. These advertisers have ads with equal click-through rates and bid $1.00 per click, $0.60 per click, and $0.50 per click, respectively. With our AdWords discounter, Pat would occupy the first ad position and pay only $0.61 per click, Betty would occupy the second ad position and pay only $0.51 per click, and Joe would occupy the third ad position and pay the minimum bid of $0.01 per click.
On AdSense
Our AdSense technology employs techniques that consider factors such as keyword analysis, word frequency, and the overall link structure of the web to analyze the content of individual web pages and to match ads to them almost instantaneously. With this ad targeting technology, we can automatically serve contextually relevant ads. To do this, Google Network members embed a small amount of custom HTML code on web pages that generates a request to Google’s AdSense service whenever a user views the web page. Upon receiving a request, our software examines the content of web pages and performs a matching process that identifies advertisements that we believe are relevant to the content of the specific web page.
Advertisements
The relevant ads are then returned to the web pages in response to the request. We employ similar techniques for matching advertisements to other forms of textual content, such as email messages and Google Groups postings. For example, our technology can serve ads offering tickets to fans of a specific sports team on a news story about that team.m
The report also notes that Google is competing with traditional media for a share of advertising dollars, noting that Google expects the majority of ad spending to continue to be concentrated in traditional media.