Though it was a great article in respects to giving info about DP's owner, it completely missed the mark when declaring google shares 78 cents for every dollar. Continue reading. The original article is here: http://www.nytimes.com/2006/01/16/t...serland&emc=rss But here is the bad news. The idiot that wrote the article is wrong! He didn't even read the financial statements! There are financial notes that he blatantly missed! Here is the jist of it: Google must record its earnings and file publically but Google can throw more than one expense into the same number and call it whatever it wants. In this case Google uses the term 'Traffic Acquisition costs'. Basically it is this: "Traffic acquisition costs consist of amounts ultimately paid to Google Network members, as well as to partners who direct search queries to our web site. These amounts are primarily based on revenue share arrangements under which we pay our Google Network members and partners a portion of the fees we receive from our advertisers." In other words 'traffic acquisition costs' are where the adsense publisher earnings are recorded. BUT the idiot that wrote the article forget to read the paragraph below: "In addition, cost of revenues consists of the expenses associated with the operation of our data centers, including depreciation, labor, energy and bandwidth costs. Cost of revenues also includes credit card and other transaction fees relating to processing customer transactions, expenses related to the amortization of purchased and licensed technologies as well as expenses related to acquiring content on our web sites." In other words, 'traffic acquisition costs' inlcude all costs related to running thier entire data center!!! That includes building depreciation, LABOR, ENERGY and bandwidth costs, as well as transaction costs from the credit card companies. Its all in black in white in the quarterly report from Sept 30, 2005 on page 10. Here is the quarterly report: http://investor.google.com/pdf/20050930_10-Q.pdf SO how did he come up with 78 cents on the dollar? Easy. Since he was rushed (or incompetent) he decided to take the entire amount of 'traffic acquisition costs' and divide by the revenue produced by google network sites (adsense publishers sites) and what does it come to? 78.x% It is disgusting to see people write articles on prominent websites and get the facts so wrong. It's like a positive PR boost for Google that will never be retracted and most people will go on their merry way thinking that they are getting a whopping 80% revenue share and access to all of google's advertisers. IF google didn't report pratically ALL its costs under that line, it would never be anywhere near 78%! So in the end, Google's rev share is still a mystery. But at least now we know that even the NY Times doesn't always get it right. And we know that Google shares a heck of a lot less than 78% after you factor in all other costs! BOB TEDESCHI, BOB TEDESCHI, BOB TEDESCHI. (that is the author of the article that is soo wrong its hilarious.) lmfao Oh, and I guess we know Google isn't stupid, they know how to keep things private in a public setting. And since Google won't say anything, they will receive plenty of positive PR from all those that go on believing everything they read, such as false reports of an 80% rev share written in the NY Times. Basically, the short version: Just read pages 9 & 10 of the Quarterly Report and you will note that in the same line they include Adsense publisher earnings, they also include a bunch of other costs. Don't believe me? Go read it for yourself. Page 9 & 10: http://investor.google.com/pdf/20050930_10-Q.pdf So what does that mean? It means Google is giving out less tahn 78 cents on the dollar. But that is as specific as we can get. Besides, if it was as easy as checking out their financial statements we would have known the % Google shares with us two years ago.
You dont have to do anything about it. But lets not go around spreading rumours that are completely false about a 78% revenue share model when it is SOOOO much lower than that. He was wrong. Googles rev. share is still a mystery. But one thing we know. It is a heck of a lot less than 78%. Just keeping things in perspective.
Because advertising publishing is a competitive business, you can expect that the company that provides the best value will win in the long run. Google would be stupid to offer low value. Google's ads offer me great bang for the buck. I don't have to do anything to find advertisers, make sure I get paid for the clicks, make sure I get paid for the impressions, or any of that garbage. I just spend 30 seconds and I have advertising that gets better every day. I don't care if Google pays me 10% or 99% -- they're paying me more than I could get if I spent 40 hours a week looking for advertisers.
While you don't care if Google is giving 10% or 99% it does factor into other peoples business decisions. If for example someone is thinking of starting a internet publishing company that will be financed through advertising and they think that Google or Yahoo or MSN or anyone else is sharing ~80% revenue share then they may decide the easiest thing to do is to just use that particular program because it not only gives them access to all those companies' advertisers but it is also not very labor intensive. But if it turns out that Google is giving between 40-60% revenue share then it might make the difference to that company in deciding what program to use and what revenue model will work best for it. It may even decide it will be more profitable to create an inhouse advertising program. So it can be very important for those that are thinking of starting LARGE companies based on the CPC advertising model online. Knowing your share of the pie is important, but 'knowing' false information could be very bad. I'm not talking about the average publisher, I'm talking about the companies that get a few million in startup capital and a bunch of employees, etc.
Google shares 50-100% revenue with Adsense publishers Marc Leibowitz, director of strategic partnerships at Google, said that Google Adsense publishers receive 50-100% of advertiser's revenue.
Interesting. Also remember that Premium Publishers get a larger % of ad revenue, so that throws off estimations even further.
Yes I rechecked and my initial post is almost completely wrong, i feel like an idiot, but there is not edit button so not much I can do about that. However I still beleive its not 78% because that number is merely an average that includes larger vendors and special contracts. Your quote about google saying they pay between 50-100% would suggest to me that Google most likely gives 50% to Adsense publishers, and then it makes special contracts with larger sites for a higher revenue share percentage. Guess that means if you get really big, you should try and approach them for a special contract so you can get a higher revenue share lol. I love that article! Now we sort of have a better understanding.
The highest percentage I have heard about that google pays out is their contract they have with aol. That contract expires the middle of this year, and aol is going with someone else (forget if it is msn or yahoo) to serve ads. The Iowa Dawg