Do you remember how people would watch movies back in the day? When a new movie was released you had to go to the theatre, stand in line and get the tickets to watch a movie. Otherwise, you had to wait for it to be aired on a TV channel. People even had to buy DVD players to watch movies. You could rent DVDs from Blockbuster Video to watch your favorite movies. But that seems to be a long time ago. Now the movie-watching experience has completely changed. It is all due to technology. People are welcome to change if they are comfortable with it. That is exactly what happened to movies now. Unlike the past, you don’t have to go to the movie theatres the movies are going to come to you.  You can watch an unlimited number of movies sitting in your couches. 

If you are still wondering how then you must be living under a rock. You can just see the explosion of new video streaming platforms every year. People are slowly losing interest in cable connections. Because you don’t need a cable connection anymore. If you want to watch the news or some TV channels you can watch them on the internet. They are looking for something new that offers them new and exclusive content. What offers them new and exclusive content? You guessed it right, video streaming platforms and there is no need to tell you what is the most popular video streaming platform right now in the whole world. It is Netflix. Netflix has taken the world by storm as it gained popularity. There is probably no one in the current generation that doesn’t know about Netflix but not its business model. 

Let’s find out what made it so successful.

What is Netflix and how it all started?

Everyone today knows Netflix as a great video streaming service but it was not the case all the time. In fact, Netflix today as we know was completely different back in the day. Netflix was founded by Reed Hastings and Marc Randolph in 1997. Before that Reed Hastings owned a company called Pure Atria where Marc Randolph used work as a marketing director. Pure Atria was later acquired by Rational Software Corporation to become the largest acquisition in silicon valley at that time at $700 million. After that Reed Hastings and Marc Randolph came up with the idea of Netflix while they were going to their homes. They liked what Amazon was doing and wanted to do something similar which allowed them to sell stuff over the internet. They thought of selling VHS tapes but dropped the idea as they were costly and too delicate to ship.

So their idea could only be put into practice once they heard about DVDs. To see if it actually worked by mailing a DVD to the house of Reed Hastings. After that Reed Hastings started Netflix by investing 2.5 million dollars. Netflix was founded to sell and rent DVDs to people online. The only other company that used to rent DVDs at that time was Blockbuster Video but it didn’t do it online. Netflix is the first online rental service in the world. With 925 movies in their library, they had nearly all the movies that people wanted to buy or sell. Netflix introduced monthly subscriptions. This allowed people to rent an unlimited number of DVDs for paying a fixed amount. It started its streaming service in 2007. Since then it has acquired rights to a number of movies and TV shows to become the Netflix we know today.

Business model of Netflix

Netflix is currently the largest and most popular video streaming service in the world. It is available in nearly 190 countries. Netflix also set up its offices in many countries. But how did a company that started in America have such a huge customer base? You have to look at what it does to get the subscribers in order to understand this. Let’s look at what Netflix does to grow its subscription-based business. 

Value for money

When you subscribe to Netflix you don’t get access to one or two movies but they provide access to all the things in their library. If you have a Netflix subscription all you need is an internet connection to stream the movies you want to watch. Not only that but depending on the subscription model you choose the features to vary. If you take a subscription plan that costs more than multiple people can stream different movies or TV shows at the same time. This means that just by paying a few extra bucks more people can use it. 

Additionally, you don’t have to watch it on one device. You can watch it on any device that has an internet connection. Basically, you can watch it anywhere at any time. You can even stream movies on Netflix through gaming consoles like PlayStation. Not just Netflix has popularized this new format of shows called web series and it has a lot of them. When a new web series or a new season for web series is released it releases all the episodes of the season at once. You don’t have to wait for the weekend to see the next episode you can just binge-watch.

Reaching the audience 

Currently, Netflix has more than 192 million paid subscriptions around the world. It cannot just advertise to increase its customer base. You have to do a bit more if you want to grow your customer base in a new country. Netflix has been very successful in doing that. When many people think of Netflix they think that since it is an American company it offers only Hollywood movies. If they had done that they wouldn’t have reached all these countries. Netflix understood that if they want to capture the local audience they have to stream movies that are made in local languages. So if you are someone from Korea or India Netflix offers movies that are made in the regional languages of those countries. So you will be able to watch content that is made in different languages. It gives the audience a wide variety of content to choose from. 

Not only that Netflix realized the potential of the content these countries can make. So apart from acquiring rights to movies, Netflix has also started producing new shows in other countries. They produce these movies or shows and make them exclusive to Netflix. If people want to see the new movie or show produced by Netflix they have to buy a subscription. Netflix also has an algorithm that suggests new movies and TV shows based on the content that you have previously watched. This will give the audience new options for viewing if they don’t understand what to watch. Netflix’s recommendation algorithm works really well to keep the audience engaged in new content. Not only movies or web series Netflix also has a lot of wonderful and mind-blowing documentaries. It also has exclusive comedy specials from the best stand-up comics in the world. 

How does Netflix make money?

Netflix is an on-demand video streaming platform. One of the reasons why people love it is because there are no ads while you are watching something. If you look at video streaming platforms like YouTube you may find ads between the videos. But when you are paying a subscription fee for exclusive content you don’t want ads playing in between your viewing. Netflix allows you to stream movies without any interruption. So it cannot make money from ads. The only source of its income is the subscription fee you pay. There are no other sources of income for Netflix so it has to keep its customer base. Netflix understands that everyone will not have the same requirements for subscribing to a video streaming platform. So they have come up with different subscription options for their customers. A customer can choose a subscription plan that suits them. 

Netflix offers a one month free trial for all of its customers. After that, you have to pay for a subscription plan if you want to stream content. Generally, it offers three subscription plans. They are basic, standard, and premium with the premium being the costliest plan. Depending on the plan you choose the features to differ. So if you pay for a basic subscription plan you won’t be able to stream the content in HD and it allows you to stream content only in one device. But if you get the premium plan you will not only be able to stream the content in HD but also in ultra HD. Not only that you can stream the content in 4 devices at a time. The subscription rates change depending on the country. If you are living in India the subscription plans are quite cheap compared to the US.

Conclusion

This the business model of Netflix. It is a subscription business model. They offer different rates in different countries based on the economic conditions of the country. You have to pay to watch it is as simple as that. This business model is completely different from the business model of Telegram which does not generate any revenue. 

This is an age of social media platforms. There are only a few people in the current world who are not on social media platforms. What is the first thing you do after you wake up? Grab your phone and scroll down through the homepage of your social media accounts. This is something that everyone is guilty of. But no one can help it, that’s how addicted people have become to social media platforms. If you observe you will find that people don’t have one social media account. You will see that they have multiple social media accounts on different social media platforms. Because different social media platforms offer different things. If you want to connect to people from your childhood or college days. You can find them through Facebook. Facebook was created so that it can connect people across the globe. 

If you want to follow what your friends and favorite celebrities are up to you will be using Instagram. It is one of the few social media platforms that became popular very quickly. Instagram changed the way people posted photos and stories. But what is the common thing that is lacking in all of these platforms? It is privacy. You may think that you are safe on some of these social media platforms but it is far from the truth. Everyone knows why Mark Zuckerberg testified in front of the US Congress. Some people might argue that Whatsapp is a safe social media application. But they may think otherwise after they know that it is also owned by Facebook. So people feel like there is no alternative for Whatsapp but there is. Telegram is a far better messaging platform compared to Whatsapp.

Wanna know why? Let’s dive into the topic.

What is Telegram?

Telegram is an instant messaging application that is similar to Whatsapp. But it is considered to be far better than Whatsapp in terms of privacy and encryption. It is one of the most popular social media applications that got popular very quickly. This application was launched in the year 2013 by Pavel and Nikolai Durov who are brothers. The founders of Telegram also founded the most popular social media platform in Russia that is VK. Both of them have sold their stakes to Mail.ru and left the company to focus on Telegram. The application was first available in Russia. After that, it was shifted to Germany. They have clearly stated that privacy was their main goal for starting Telegram. The founders of Telegram want to protect the data of users at any cost. So they do not disclose the location of their offices. 

They do this to avoid governmental requests for data. It said that the company is moving from country to country with 15 core members. In the year of its launch Telegram had only 100,000 users which are great for a new company. But by March of 2014, it had more than 35 million people using it. By the end of 2014 Telegram had more than 50 million users sending a billion messages every day. Currently, Telegram has more than 400 million active users. So it is without a doubt one of the largest social media platforms in the market. But what made Telegram so popular among people. What prompted them to ditch the giants in the social media world and use Telegram? Maybe you can understand this if you know about its business model.  

So let’s take a look at Telegram’s business model.

Business model of Telegram

As mentioned earlier Telegram is an instant messaging application that has privacy as its primary concern. All the application focuses on is how to provide a safe platform for people to facilitate messaging. There is no such thing as a business model that generates revenue. If you know anything about Telegram then you probably know that it is for free. This cloud-based application has security and privacy as it’s selling points. Everyone knows this and it is quite evident. You can say this just by looking at the track record of Telegram. The company had to frequently shift its base from country to country. This kept happening as they would have frequent run-ins with the government of every country they set up their base in. But finally, now it has settled in Dubai. 

Privacy was the reason why many people started using Telegram. When the South Korean president raised concerns on the privacy of other applications millions of people in South Korea switched to Telegram within a matter of days. The great thing about Telegram is that it did not even spend a single penny on promotion. All of its user base is generated organically. According to many sources, the company is valued anywhere between 3 to 5 billion dollars. But the founders have stated that the company will never be sold. They also stated that making a profit is not their end goal which brings us to the next topic. 

How does Telegram make money?

Believe it or not, Telegram is a non-profit organization. It does not earn a single penny for offering its services. One of the founders Pavel Durov stated that they believe in a fast and secure messaging application that is also completely free. So it is quite clear that they do not earn money from this. But how do they pay the salary of their employees? They have stated that their company runs on donations. People who understand the vision of Telegram make donations to the company. 

Pavel Durov has said that they have enough money with them for now. Money that is sufficient to pay the bills. But they are not certain of the future. If they run out of money they will introduce non-essential paid options. They want to do this to support the infrastructure and pay the salary of the employees. As long as they can do that they don’t care about profits which is something you don’t hear from a company that has one of the largest user bases in the world. They have also clearly stated that they are not going to monetize it by showing ads or by charging a subscription fee. 

What makes Telegram different from WhatsApp and other applications?

As mentioned earlier it is a cloud-based application. That means all of its data is stored in the cloud. But what makes it a better messaging application is its multi-data center encryption and infrastructure. It allows Telegram to be more secure and faster compared to other applications like Whatsapp. So if you’re data is saved once then you will be able to access it from anywhere using any device. Not only that but you can also keep track of messages and download any file whenever you want. Telegram gives you an option to send your data or files without compressing them. You can see that images that are sent through WhatsApp are compressed. Due to this they lose their quality and you won’t be able to find little details but Telegram is the opposite of that. They do not compromise on quality. 

Not only that they also allow you to send files that are large in size. You can send files that are 1.5 GB. This allows you to share videos that are recorded in 4K. It also streams the video while the video is being downloaded in the background. This helps you in previewing the video. It allows you to send all types of files irrespective of their format. There are also bots on Telegram. These are the channels that are operated by AI-powered bots rather than humans. Telegram offers you to have two types of groups as well. One is normal groups with 200 members where you can add people from your contact list. The second one is called a supergroup where you can have 100,000 members. 

Conclusion

This is the business model of Telegram. It is shocking to know that this platform does not generate any revenue. They consciously took this decision to provide security and privacy to people who commendable. Telegram is offering privacy in a world where it is dying. The business model of Duckduckgo also has a similar policy but it does generate revenue. With the growing number of users, you can only hope that Telegram gets enough donations to keep offering 

Undoubtedly, Google is the leader of all search engines in the world providing users the best search experience always. It ranks 1st on the Alexa Index, proving it does its best to keep up the position. 

In fact, you should admit that most of the time you use the term “Google it” instead of “search it”, right? This simply proves how greatly Google has created its mark in people’s lives. Simply, Google became the synonym for web search. Isn’t it? 

Google had an 88.37% of the U.S search engine market as per September, 2019. According to research, over 2 trillion searches are made on Google per day around the world.

However, Google is not just a go-to place for web users but also an income source for businesses. Google makes a great advertisement platform for businesses to promote their services and products, so that both companies and users get benefit out of it. The interesting part is that this is how Google gets its major profit.

While Google offers free services for web users for absolutely free, most people wonder how it makes money. So, as said it is through advertisements. Yes, the ads you see in the search results, some of your favorite blogs or sites make a large profit for Google. Curious to know more about it? Then you should keep reading. This article covers the business model of Google, how Google makes money and other interesting things about the search engine giant. So, let’s get started.

How does Google Make Money?

“In 2019 we again delivered strong revenue growth, with revenues of $162 billion, up 18% year over year and up 20% on a constant currency basis,” said Ruth Porat, Chief Financial Officer of Alphabet (Google’s parent company) and Google.

Google is the leading subsidiary of Alphabet, one of the Big Four companies. The main reason for being such a successful and popular company is the free services it offers. Right from checking today’s weather to taking serious medical appointments, you rush to Google, all for free.

In fact, this is why people are more curious about Google’s Business model. How does Google make money while it is offering free services such as access to web search, Google Maps, calendar, Google Drive etc? Okay, without further ado, let’s get into it…

Google’s business model is vastly diversified. As most people think, it is not just the advertisements, or by selling its stocks or shares, there are multiple ways Google makes money. Advertisements bring 88% of revenue though. However, let’s see them in detail.

Before that you should know all the products and services of Google, so that you can clearly understand from where do this invaluable search engine get the money.

Google’s Products and Services

• Search engine – Google search
• Advertising – AdSense, Google Ads, AdMob
• Consumer services – Gmail, Google Maps, Google Drive, YouTube, Google My Business
• Software – Android mobile OS, Google Chrome, smartwatch
• Hardware – Pixel, Chromebook, Chromecast, Google Home, Google Wifi
• Enterprise services – G Suite
• Payment services – Google Wallet

Google search is a complete free service for web users. In order to help businesses reach more potential customers and users know commercial information about the products and services they look at, Google introduced Ads. There are three types of ads:

1. Google Ads: Previously known as Adwords. It is an online advertising platform designed for businesses to promote products or create brand awareness. The advertisers need to pay for placing their ads on either web page results or on others websites. Advertisers should bid to create their campaigns.

There are majorly two types of campaigns again.

a. Search Network Campaign: This allows you to display your ads in the Google search results. Your ad will be displayed when the users search for targeted keywords. You will have to  choose either pay-per-click or pay-per-impression

b.  Display Network Campaign: This lets you display your ads on Google’s partners and members such as YouTube, Gmail, and other websites where your target audiences visit mostly.

2. AdSense: It is the publisher based platform where publishers or blog or website owners can make money by renting some space on their sites.

3. AdMob: This is also the same as AdSense, but here the advertisements run on mobile applications.

As said, the ads run based on bidding, Google assigns position for advertisers based on how much they bid. 

However, it takes quality of content as a major consideration while ranking ads. Google is all about endless algorithms, right? 

Here is how Google calculates the positions of ads.

Image credit: WordStream blog

It takes a part of fees from advertisers and publishers. In fact, this is how 88% of revenue is made from ads. Millions of advertisers bid for each set of keywords and millions of publishers pay commission to Google for displaying ads on their websites.

The revenue share ratio of partner and Google for search ads is 51 and 49 whereas for YouTube it is 11:9.

Now, you have seen how Google earns a major portion of its revenue. Now let’s see the other ways it makes money.

How does Google Make Money from its Consumer Services?

YouTube made a digital revolution in the video streaming industry. Over 2 billion people use YouTube, and makes it the second largest search engine. YouTube was acquired by Google in November, 2006 and it is one of the successful Google’s subsidiaries.

YouTube makes money from video ads, advertisers need to pay for displaying their ads on other videos. At the same time, it lets YouTubers also earn some money. Later, after the YouTube Premium version was introduced, its revenue doubled as users will have to pay money to access ad-free videos. Both the ways YouTube makes a good deal of money. Either the user pays or the advertisers.

The other services offered for users and businesses (small, medium and large) are Gmail for email service, Google Drive for offices and Google My Business for businesses. All these services are available as Freemium services, meaning available as both free and paid versions. While the basic features of these services are for absolutely free, people need to pay for accessing the advanced features. Most companies use Google’s paid products to run their businesses.

Ride sharing companies such as Uber, Lyft etc pay Google Maps for its services. Also, it earns through local search ads and promoted results.

Google Translate is also another application that is free for individuals and costs for businesses. It charges businesses for translating content to other languages. Developers need to just send the HTML documents for translation.

How does Google Make Money from its Software and Hardware Products?

Google is into everything, every niche, literally. Though hardware is not its core skill, it even entered into it and started growing. It designed Pixel phones, Chromebook, Chromecast, Google Home for assistance, Wi-Fi, self-driving cars, etc. Google acquired several technology companies to help people solve their issues through technology. Though its products such as smartphones or other devices don’t sell as its competitors sell, it is at least not in a loss but still struggling.

It is estimated that Google makes no less than $2 billion from its hardware business.

Coming to software products, Google is basically one of the tech giants, it designed the Android mobile operating system, Google Chrome, smartwatch software called Wear OS. Though it doesn’t get a huge amount from the browser Google Chrome, it can still manage its expenses.

Google also earns from domain registration service, Google Domains. Google Domains works almost similar to other domain registration services like Godaddy.

How does Google Make Money from its Enterprise Services?

G Suite is available from USD 6 to USD 25 per month based on the requirements for small to large enterprises. G Suite includes Gmail, Google Sheets, Google Docs, Google Slides, Google Calendar, Google Hangouts, Google+, Google Calendar and Google Forms. 

Nearly 12670 companies including Google, Netflix, Uber, Twitter, Spotify etc use G Suite for running their business smoothly.

Is Google’s Business Model Sustainable in the Long Run?

Nothing is easy in this world, especially in this digital era with tough competition everywhere. In the same way, Google also made a few flop decisions such as acquiring Motorola Mobility. It acquired it for $12.5 billion in 2012 to grow it but later in 2014, it sold it for Lenovo for $3 billion which is not even quarter of its acquisition price.

Also, there are services that have scope for earning, but it still offers them for free. One such service is Google Pay.

Google’s payment service Google Pay, formerly known as Google Wallet also doesn’t make any money like other free services. It just lets users and merchants send and receive money for free. However, there is a huge scope for Google to make money from it. It can either charge transaction fees from merchants, or banks and also through ads and product offers.

Despite all these, Google is still one of the best players in several domains around the world. As you can see in the above lines, the major revenue comes from ads. Moreover, it feels that it is providing users the best experience in finding the right fits (either product or service) through ads. Also, it always tests new features to improve user experience. So, until it remains successful in delivering quality for users, its business model is sustainable.

Bottom Line

So, this is all how Google makes money. It’s business model is a little hidden but also transparent. Secret because you don’t know how much other advertisers bid for their campaign and how many hardware & software products it sells exactly. All it is clear is, it makes nearly 88% of revenue from Advertising and the rest from its other products and services. Hope you have got a clear understanding of Google’s business model.

People have the luxury to order anything online and get it delivered to their homes. This is not a new thing in today’s world. Moreover, it has only been increasing in the last few years. No one has to tell you on how Amazon has made its founder the world’s richest man. You can just look at the major e-commerce websites and understand why they are thriving. It is because people are liking the trend of getting orders delivered to their homes. They love the idea that they can press a few buttons on their mobile screen and get anything done. Many companies have understood this and are trying to do the same with the services they offer. You can find a lot of products and services that are trying to deliver you the services at your doorstep. One can notice the emergence of new startups that do the same.

You must have noticed that food delivery services are becoming more and more popular in recent times. Before a decade only a few franchises like Dominos would deliver food to people’s homes. But they would only deliver pizzas and not any other food. Some people have thought what if all the restaurants in the city could do the same. So they started coming up with this idea of just having a service that solely focuses on delivering food from the restaurants to people’s homes. Soon many food delivery services have started popping up in different countries. There are food delivery services like GrubHub in the USA and Deliveroo in the UK. You can find the Postling article that explains the business model of Deliveroo. Similar to Deliveroo, Swiggy is the food delivery service that is rapidly expanding in India. A country with 1.3 billion people is loving this idea.

What is Swiggy?

As mentioned earlier Swiggy is a food delivery service that operates in India. This platform has become quite popular among people of all age groups who are living in cities. But this was not always intended to be a food delivery service. The founders of Swiggy had other plans before it ventured into the food delivery market. Sri Harsha Majesty and Nadan Reddy who are two of the founders of Swiggy first created an e-commerce website that provided shipping and courier services in India. They wanted to get into the food delivery market so approached Rahul Jaimini who was formerly working for Myntra. It was at that time the company was rebranded as Swiggy, the food delivery service that people are familiar with. Swiggy was launched in the year 2014 with its headquarters based in Bangalore  When Swiggy entered the market food delivery market was at its lowest. 

All the major food delivery services were suffering losses and some of them shut down. Swiggy started rapidly growing by building a good delivery network. Within five years of its inception, it started operating in more than 100 cities in India. The major reason for its popularity was its success in big cities like Bangalore, Mumbai, Delhi, and Hyderabad. Before Swiggy arrived not many people in India used to order food online. But now there are hundreds of thousands of people who are ordering food from this delivery app. Even Swiggy has managed to adapt to different cities it operated in. It did not just offer services all around the city but slowly built its network around the cities. With a population as huge as India’s, Swiggy had a lot of market share to capture. Looking at the business model of Swiggy might give an idea of how it works.

Business model of Swiggy

Just like Deliveroo, Swiggy’s business model is a hyperlocal on-demand business model. This means that it provides food delivery services in local areas of the city on-demand.  In order to do this, it has to partner up with the restaurants. Not only that it has to hire local staff that is keen on delivering food at all times of the day. This seems easy on paper but not so much in reality. The reason for this is that people and especially restaurants in general in India are not so familiar with the concept of food delivery services. So convincing them to join hands with Swiggy is a difficult task. Because most of the big restaurants are hugely popular in their locality and experience a massive flow of customers every day. Even the takeaways are huge in numbers. So if they try something new like this may disturb their daily routine.

But Swiggy pulled it off. Let’s look at the two major pillars of its business model. 

Restaurant partners

Restaurants are the first thing Swiggy focuses on when it decides to provide its services in new cities. They have to get the best and most popular restaurants in the city on board if they want to see success. So they go to each restaurant and ask them to partner up with them. They will explain the benefits of partnering with them and the potential to grow their business. The other thing they do is ensure the restaurants that they will see guaranteed results after some time. They provide restaurants with technology that allows them to take the orders as soon as they are placed online. 

Not only that but the Swiggy does not demand the restaurants to provide the food to delivery boys in a fixed time. If the restaurants are busy then they can take a little longer to prepare the food. So there is no pressure on the restaurants in terms of making food. Not only that, a person can only order food from the restaurants that are their areas. There is a limit on the distance. So you could only order if you are within a certain radius of the restaurant. This is how it manages to efficiently deliver food people.

Delivery partners

The other main component of the company is its delivery partners. If you want to sustain in the food delivery service market in India then you have to be at your A-game. You have to provide the best service if you want to survive. To ensure this you have to have delivery partners that are ready to deliver food in all circumstances. So if you expect them to deliver food no matter the situation you have to make sure they get all the things that are necessary. Swiggy promises high pay to its delivery partners for the first few months. In the first months of their job, they get paid a lot. This makes sure that they are loyal to the company. 

They not only get paid to deliver food but they also get to keep the tips given by the customers. These tips are given by customers at the time they order food. Not only that but they also get incentives for delivering x amount of orders. This will motivate them to deliver food maximum number of times as they would not get the amount of money they received when they got hired. The delivery partners are given an app that receives notifications as soon as they are assigned to deliver an order. It will show them the restaurant at which they have to pick up the order and the address at which they have to deliver it 

How does Swiggy make money?

Swiggy is currently the largest, most popular, and valuable food delivery service in all of India. It generates a revenue of over $120 million dollars every year and the number is only increasing. You might be wondering how it makes all the money. Let’s take a look at it.

Delivery charges

Swiggy charges some money for delivering food to the customers. At first, it did not do this as they to get a hold on the market. But after they established themselves they started charging a minimum amount of money to deliver food. They had to do this because they don’t have any minimum order policy which makes it hard for them to earn money on food that is less than ₹100. So they have to charge a minimum amount for delivering food. They usually charge ₹20 for delivering orders. Apart from that, it charges extra money during the time of high demand. This is done at the time of rain or other occasions.

Commissions

This is another way in which Swiggy earns its income. It will charge commissions from the restaurants on the total bill. The commission depends on various factors like the city, restaurant, and frequency of orders received. They don’t demand much commission if they are trying to penetrate into a new market. Swiggy only charges 2% to 3% if they are operating in a new city. But if they are well established in the city they charge anywhere between 10% to 15% commission on the bill.

Advertisements

Apps like Deliveroo advertise restaurants for free so that the restaurants can get more money. But Swiggy does the complete opposite. They charge restaurants to promote them on the opening page. The restaurants should pay Swiggy if they want their restaurants to be shown as soon as people open the app. You will have to pay more if you want your restaurant to be at the top of the list. 

Subscription

It also earns money through its subscription plan called Swiggy super. This subscription offers many advantages to people who pay for this. Customers will get free delivery on orders above ₹99 and many other discounts that other public do not have access to. It has one month and three-month membership. 

Conclusion

This is the business model of India’s largest and most successful food delivery service. It is a combination of brokerage and subscription business models. Currently, Swiggy offers its services in more than three hundred cities and towns in India. It is keen on expanding its services to other regions. Apart from the mentioned above services it also makes money by being an affiliate to banks.

What is the single most thing that people cannot live without these days? It’s their mobile phone. Mobile phones or smartphones have become such an integral part of people’s lives. People are using mobile phones for everything. Just recall how many times you must have used from morning till now. You will see how much you are using your smartphones and for what purpose. Before a decade most people only used cell phones to make calls or send an SMS. But today smartphones can do almost anything that a computer can do. With each passing day, you get new models of smartphones. These days smartphones are mostly being used to do other things apart from making or taking calls. People are using their cell phones either to go through their social media accounts or search for the information they want. There is something here many people don’t realize About

See, you are using these social media platforms or search engines for free. But have you ever wondered how they are making money if they provide their services free of cost? Many people by now have come to know that these platforms make money through advertisements which does not seem like a big deal when you hear about it. Because what is making money by showing ads right? No, it is not about showing ads. It is about the strategies they are using to show ads that you should be worried about. All the social media websites especially search engines like Google are tracking each and every action of yours. This will allow them to come up with algorithms that can predict your actions. Tracking every action means there is no privacy on the internet. This is where companies like Duckduckgo come into the picture to safeguard your privacy.

What is Duckduckgo?

Duckduckgo is just another search engine like Google or Yahoo. But the only difference is that they do not track the activities of their users. This company which was established in 2008 is a search engine that provides internet privacy. It aims to become Google that does not track each and every step of the user. Duckduckgo was founded by Gabriel Weinberg sold his previous company NamesDatabase to Classmates.com. He got $10 million dollars which were enough to fund his next venture which is Duckduckgo. The main aim of Duckduckgo is to make the internet a safe space for people. Seeing this Union Square Ventures funded it because they knew that the future of search engines was dependent on the privacy they provide. After a few years, Duckduckgo became a profitable organization but the problem is that it did not earn anywhere near what Google earns. 

This is very unfortunate for a company with good intentions. Because the big companies like Google, Facebook, and many others have been accused of leaking the private data of the users to other companies. This is not a new practice by these companies as they have been doing this for a long time. Most people who follow news might have seen the news about CEOs like Mark Zuckerberg and Sudar Pichai being summoned by the courts on accusations of selling private data of the users. They say that they need to track data to ensure their users get great user experience. But this is far from the truth. Duckduckgo knows that such actions are unethical and unforgivable. So they make sure that they don’t track any information even after having 22 billion searches under their belt. Then how does it generate revenue? Its business model might give the answer. 

Business model of Duckduckgo

As mentioned earlier, Duckduckgo became a profitable organization in 2014. The best thing is that it did this without storing or sharing a single piece of information of users. All of your information is strictly confidential and it is kept private even from the company. All the search engines and social media platforms make people believe that they are offering you a product that is not true. The truth is that the product is you. You are being offered as a product to the advertisers by these platforms. This is the business model that is completely opposite to that of Duckduckgo. Duckduckgo prides itself on being a search engine that provides internet searches without storing information. The thing that is offered by Duckduckgo is not the search engine but the privacy that comes with it. It allows you to be in control of all your private information online.

The main source of the business of Duckduckgo is definitely its search engine and it is always going to be that way. However, they have understood that it is not enough to survive in the market against competitors like Google which are global giants when it comes to search engines. So they have come up with new ways to reach out to more people. The first thing they have done is to create their own application and made them available to the public through Google Play Store and Apple iTunes. Not only that it has also created a Google Chrome extension to make it more convenient for people to use it. So if you don’t want to use their search engine you can simply add an extension to Google Chrome. It also offers a free API that can be used for public use after they give approval through an email.

The difference between Google and Duckduckgo

By looking at how these two search engines work you might understand the differences between them. It will help you understand why it is important to use Duckduckgo. Let’s look at what happens when you search for a query on Google and Duckduckgo.

Searching query on Google

When you search a query on Google you will get search results. In those search results, you will also find ads. They show ads that are relevant to you based on the keywords you used. But this is not the only thing they do. Once you search for a query Google stores the query and keywords you used. If you searched for a product then it will use these keywords to show the advertisements of the product even after you are done with your search. Not only that it starts showing you the advertisements of similar products on its other platforms like YouTube. If you click on any of the search results it will allow the website to store your digital identity. By using these identities like IP addresses the websites will have complete information about. 

They will know who you are, what you searched for, and which device you used to search the query. Not only that they will know your exact location and time the query was searched. This will give them all the information to create algorithms that will help them in making you click their website again. If you have ever seen an ad pop up about a particular product after you have just discussed it with your friend or colleague then understand that Google has been tracking you. They are even using your microphones in your cell phones to track information. 

Searching query on Duckduckgo

It is completely opposite when you search for a query on Duckduckgo. When you search something on Duckduckgo it also provides search results along with advertisements. Duckduckgo also does this depending on the keywords you used but the only difference is that it does not store your query. Once you get search results and ads for your query Duckduckgo will have no information about it. If you click on a website even it could not track your actions. This is because Duckduckgo does not allow them to get your real identity. It encrypts the information of users so that these websites do not track the activities of the user afterward. This might make you wonder how Duckduckgo generates income. Let’s take a look at it. 

How does Duckduckgo make money?

All of the search engines make money through advertisements and Duckduckgo also generates its revenue by showing advertisements. As mentioned earlier, it shows you the advertisements depending on the keywords you used in your queries. This is something that search engines have to do if you want to use them for free. Search engines let you use them for free because the advertisers are paying them. Most of the search engines also make money by selling your data. But Duckduckgo is different. It makes sure that the other websites do not track you. Duckduckgo does this by not storing your search results or history. 

Every time you use Duckduckgo it’s like you are using it for the first time. It only shows you ads based on keywords and it does not show you targeted ads. If you search for shoes you will get ads without saving the search history. It also generates income by being a non- tracking affiliate of companies like Amazon and eBay.

Conclusion

This is the business model of Duckduckgo and the way it generates revenue. Its business model is an advertising business model. But Duckduckgo is much more than that. It offers internet privacy in a world where privacy on the internet is a myth. This way of doing business is quite different from others. If you want to know about the business models of other companies like Deliveroo and ProductHunt then check out those articles.