Article taken from traffick.com : Google's impressive Q4 2009 earnings report makes certain aspects of the business clear for all to see. For example, they report that revenues of $2.07 billion in revenue was generated by "Google partner sites through its AdSense program," and that "amounts ultimately paid to our AdSense partners" totaled "$1.47 billion in the fourth quarter of 2009". Misleadingly, the report states that "TAC (traffic acquisition costs) as a percentage of advertising revenues" is 27%. True, but as a percentage of same-channel advertising revenues, it's 72%. There are virtually zero TAC's for "Google-owned sites." Speaking of those Google-owned sites, they generated $4.42 billion, or 66% of Google's revenues. In these numbers is the usual picture of impressive strength -- including the fact that the overall number of paid clicks rose 13% YOY (indicating continued success in optimizing page layouts while satisfying users) while click prices rose just above the rate of inflation, at 5% (indicating a leveling-off). But coupled with that strength is the interesting point that financially speaking, Google continues to provide only the illusion of a diversified company. It continues to do well, very well, based on its core cash cow. Elsewhere, it serves as a relatively polite intermediary that continues to face downward margin pressures. The growth picture is an interesting mix: heavy investment in new areas like mobile (a longer road to profitability), and a relatively smooth path to continued growth simply by enjoying the great upside that remains in international markets in its core strength. Which, in case anyone has forgotten, features the catchy advertising product: "Google AdWords." The financial picture for GOOG remains very bright, but mainly because its core strength has such high margins, and Google (needless to say) owns the key "publication" (Google Search) outright. ------------------------------------------------------------------------- I am surprised to read this as i thought google was keeping more than 50% of the CPC. What are your oppinions on this?
I had heard that Google is too generous as it pays you 3/4th of normally what they get. And this proves it! You earn money, you are happy. Advertisers gets traffic, they are happy. Google keeps 28%, they are happy. This is an example of perfect business, with great sustainability ratio in the future. And this is why Big G earns so much..!!
It's nothing new, most respected Adsense-like company gives at least 70% of the revenue to the publisher. It's that Google is dominative and thus they get the best and high paying advertisers.
Lately there were many rumors spreading about this cost percentage. But now it is clear about the cost. Thanks for the cost.
Well its new to me. I thought Google was keeping a big chunk of the profits and screwing their publishers but I guess not.
What you might consider screwing, is that if you have low quality clicks for advertiser or low quality website, they won't show the most high paying keywords on your site...
Google earns a lot. And all of us here want to earn some money through google adsense. Thanks for the post!
I thought google keeps 40% when someone click on the ads on the publisher page. Its really a good news to know google just keep 28% and rest to the publishers.
Hopefully when the economy turns around and there are more advertisers this will help everyones payout . This is the first I have heard of an actual percentage .