Ah, the jolly ol’ Beeb, serving up juicy pictures of firing squad executions so they can be most viewed by the ravenous public!

Remember, your license fee goes to good use.

Update: And now they’ve covered the tweet from the guy who gave the order to execute him. Classy!

Oh Google with your heart so kind,
Save us from this nasty bind!
Apple locks us down so hard,
You’re free for all, a great trump card!

Well, actually, no.

Google makes great products, and is taking Apple’s iPhone head-on with Android, Google’s operating system for mobile devices. People love that Google doesn’t restrict how you develop for Android, people love that many of Google’s products are free, and people love that Google provides fast, efficient searches. Therefore, it would be easy to think that Google does well solely from an increase in open, free Internet usage, allowing them to act altruistically in everything they do.

Easy to think — except incorrect.

Google is a multi-billion dollar company which makes the majority of its money from advertising. And the obvious ways for Google to evolve advertising, and to continue making more money, might not be everyone’s cup of tea.

In the first quarter of 2010, advertising on google.com sites — for example, those ’sponsored links’ you see on search results — accounted for 66 percent of Google’s revenue. (In case you’re wondering where they make the rest of their money, another 30 percent comes from the Google ads you see on other sites.) That percentage has been about the same for a couple of years, so search advertising remains, for them, as important as ever. If you don’t search on google.com, Google makes less money in a core area. Simple as that.

And here’s the thing: search is historically a fickle market. Heard of AltaVista? Perhaps not. They were the leading search engine in the late 90s, dishing up millions of searches per day. Then they plummeted, and whilst the internet bubble collapse didn’t help, they were also thwarted by migration to a new search offering called Google. There’s hardly any brand loyalty in search: you arrive, you find something, you leave. Customers, not clients. That’s got to be a scary thought when search underpins $4.4 billion of your quarterly revenue.

So when people say “If you use the Internet, Google wins”, what they mean is, “If you use lots of Google products and do lots of Google searches on the Internet, Google wins.” And if, for example, Bing (Microsoft’s search offering) starts eating into Google’s search dominance, and hence their search advertising revenues, or if Google simply wants to grow more into non-search markets, it will need to find additional ways to ‘win’.

If you think it’s by selling new products and services, so far that don’t seem to be the plan.

Prime example: Google’s Android operating system. You may have heard of smartphones using it, such as the Nexus One, the EVO 4G, and many other new phones not called ‘iPhone’. But guess how much Google apparently charges phone manufacturers to put Android on their phones? Zero. Zilch. Nada.

And bear in mind that Google is aggressively developing Android and taking on Apple — recently, Android overtook iPhone OS marketshare in the US. This is not a hobby product, this is a huge investment.

So if we assume Google hasn’t taken leave of its senses, how can you imagine they plan to make money from Android and all their other ‘free’ offerings?

Search is one obvious route, a no brainer, but we’ve already seen it’s far from a guaranteed bet in the long term.

Paid services is another obvious option. Google Docs and Google Analytics are prime candidates, services for which you historically pay. However, paid services is not a revenue model they’ve shown any interest in so far. It’s also a long, tortuous road to wean people off something that’s been free for years. (Incidentally, the most common way you do this conversion is to maintain a parallel ‘free’ version, paid for by… yes, you guessed it, advertising.)

The more likely route then? More targeted advertising, in more parts of your life.

You likely already use many of Google’s services, such as maps, spreadsheets, word processing, web search, social networking, books, image search, news, calendar, stock market services, and video — Google owns YouTube, by the way. That’s already a lot of Google fingers in your daily life pies. And ads on all those services will surely become more tailored, because surprise!, when using those services you’re likely signed into… Google. And therefore they can theoretically — subject to their privacy policy and intent, which I’m coming to — record and analyze everything you do.

Heck, Google tailors your ads already and you probably didn’t realize. I didn’t. Go to your Google ads preferences, and see if Google has identified any of ‘your interests’. (If you have a Google account, sign in first, then go to the page.)

Now, targeted advertising is nothing new, and I reckon Google is currently a very ethical player in this space. Their privacy policy is currently clear, and everything I’ve read shows they’re open about what they’re doing with analytics and advertising. I like their products, and I like their ethos.

But don’t kid yourself that Google is making all its services more open and free ‘for the good of the people’. At the time of writing they have a market capitalization of $160 billion. They have obligations to their shareholders. They ultimately want to maximize their profits and growth.

So let’s nix the idea of the Google knight in shining armour, galloping over the horizon to save us all from untold Apple woes, encouraging us to ‘use the Internet’ with free, open tools whilst all the time avoiding doomsday scenarios akin to 1984. Whether by choice or search competition, you can guarantee that Google will try new ways to make more money. It’ll just be business. How they do it may be more or less palatable depending on your sensibilities.

If you understand how these companies make their money, and how they might make more money in the future, you win.