• by Janet Driscoll Miller , February 21, 2012

Last week I spelled out some of Google’s problems -- from having too much of its revenue tied to one product, to having to facing a myriad of new competitors in the advertising space.  Here are some possible solutions:

1. Get more clicks. Since advertisers are charged by the click, why not find ways to increase clicks on ads?

Over the past few years we’ve seen multiple tests to try to increase searcher click through rate on ads, including:

• Move ads closer to the organic results, possibly to increase their visibility.
• Adding more options on ads, such as sitelinks, to increase click-through
• Adding more ads to the page, including testing ads at the bottom of the search results page.

2. Raise minimum cost-per-click. Using Quality Score as a guide, Google sets a minimum cost-per-click for each keyword you advertise on. However, many advertisers report having increased minimum costs-per-click, even when no competition is present. In other words, even if your ad is the only one on the page, if searchers click on the organic results more, then your cost-per-click will likely increase.

How convenient for Google! Google’s reasoning is that quality score is a measure of the quality of your ad… but is it always? In the case where you are the only advertiser on a page, perhaps not. And because you can’t necessarily trust the quality score Google displays to advertisers, it would be easy for Google to manipulate minimum bid requirements to force advertisers to spend more per click.

3. Diversify. Google’s next step is to begin to expand its revenue stream beyond Google AdWords. With the birth of the Android platform and Google’s app marketplace, the company has created a whole new revenue stream for itself. Additionally, it’s looking into expanding into hardware devices, as evidenced by its purchase of Motorola Mobility  and other opportunities, such as a home entertainment device. But those purchases and investments will take time to pay off.

4. Fight fire with fire: make advertising better. The one thing I’ve always missed with Google AdWords is its lack of true demographic targeting. Enter Google+ and the privacy policy changes across Google.

With Google+, Google isn’t trying to become Facebook --it’s just trying to be a better advertising vehicle than Facebook, perhaps become the ultimate online advertising vehicle. By creating an environment to attract users via social content and applications, Google can further build up its knowledge about you. It can understand who your friends are, your personal demographic information, and more.

There’s just one hurdle left, though, to integrating that information: the previous privacy policy. Google previously used cookies to record your data on its properties. While that’s not atypical of many websites, cookies are browser-specific and often saved on a device. But what if Google could save that information -- the information from your mobile phone usage, your browser and your GoogleTV and more -- and integrate it in one place to get a more specific picture of you? And so the privacy policy had to be updated to allow that.

Conclusion

So will Google+ and all of Google’s other solutions to its business problem allow it to prevail and continue monumental growth? Time will tell. But one thing is for sure -- there’s no ONE Google-killer. But if these solutions don’t work, if the company doesn’t diversify revenue streams and adapt, Google could just kill itself.