My mom doesnt 'get' how eCompanies like Google, and Yahoo make money...?

I already explained that google & yahoo have revenue-making ads on search and their network sites, and i already told her that they both create and liscense software & technology, and that Google helps businesses with their custom computers...but she just isnt a believer in the .com revenue streams, and thinks these companies are all a hoax. so...can anyone help me explain it to her, in a really simple and believable way?

Compare them with television stations - which get their funding from advertisements.

The short answer is targetted advertising.

When you make a search on the site, it generates ads specific to what you are intrested in. This is worth a lot of money to companys. The sponsored links are actually relevant, so some percentage of the people that see them click on them. Note that this is very different from Banner Ads - those are generic ads targetted at a demographic (or sometimes not targetted at all).

Both companies are publicly traded on the stock market if you don't believe the money they generate using Google as an example here. Check what Google's shares are worth

http://finance.yahoo.com/q?s=GOOG

How about their annual income statement:

http://finance.yahoo.com/q/is?s=GOOG&ann...

In 2006, they pulled in $10,604,917,000 making a cool $3,077,446,000 profit. That is something that would make you not want to believe its true im sure.

If you want to know more of exactly how they make their money you can find out here:

http://investor.google.com/faq.html

ou see the company both have a shop on there site. You know like Google have froogle and Yahoo got Yahoo Shop. Also people that use the site to sell things they pay the company money

Simple terms?

It is advertisements. Companies pay millions to get listed on their search engines, pay extra millions to place an advertisement on their search engine.

The other thing is that they make softwares such as mapping software for e.g. Google Earth which are used by movies, televisions etc. But the major revenue is advertisements.