The Massive Mystery In Google's Finances

#1

Post by Straubiz » Fri, Jul 15, 2011, 8:42 AM UTC

The Massive Mystery In Google's Finances
siliconvalleywatcher.com

Re: The Massive Mystery In Google's Finances

#2

Post by binarymax » Fri, Jul 15, 2011, 9:15 AM UTC

This is a wild guess, but what about partner sites' changes also having an effect? The NYT implemented a paywall - possibly resulting in a significant reduction in adsense income?

Re: The Massive Mystery In Google's Finances

#3

Post by Iv » Fri, Jul 15, 2011, 9:16 AM UTC

binarymax wrote: post #2

This is a wild guess, but what about partner sites' changes also having an effect? The NYT implemented a paywall - possibly resulting in a significant reduction in adsense income?

Wouldn't that imply less revenues for Google as well ?

Re: The Massive Mystery In Google's Finances

#4

Post by jupiter » Fri, Jul 15, 2011, 9:20 AM UTC

Iv wrote: post #3

binarymax wrote: post #2

This is a wild guess, but what about partner sites' changes also having an effect? The NYT implemented a paywall - possibly resulting in a significant reduction in adsense income?

Wouldn't that imply less revenues for Google as well ?

Not if they shifted traffic to their own free inventory

Re: The Massive Mystery In Google's Finances

#5

Post by binarymax » Fri, Jul 15, 2011, 9:21 AM UTC

Iv wrote: post #3

binarymax wrote: post #2

This is a wild guess, but what about partner sites' changes also having an effect? The NYT implemented a paywall - possibly resulting in a significant reduction in adsense income?

Wouldn't that imply less revenues for Google as well ?

Yes you are right, I suspect my guess is only part of the equation. Google must have shifted something as the article suggests.

Re: The Massive Mystery In Google's Finances

#6

Post by notintokyo » Fri, Jul 15, 2011, 9:27 AM UTC

Maybe these are mobile searches.

Re: The Massive Mystery In Google's Finances

#7

Post by binarymax » Fri, Jul 15, 2011, 9:30 AM UTC

notintokyo wrote: post #6

Maybe these are mobile searches.

Good point, half a million android devices are being activated daily apparently. Free apps with adsense on all those devices is a possible explanation.

Re: The Massive Mystery In Google's Finances

#8

Post by dirtyaura » Fri, Jul 15, 2011, 9:35 AM UTC

Two wild guesses:

Video ads - They finally figured out efficient video ads and have turned YouTube from a loss leader to a money-making machine

Mobile ads - Do GMail and other Google apps on Android already show ads?

Re: The Massive Mystery In Google's Finances

#9

Post by patio11 » Fri, Jul 15, 2011, 9:36 AM UTC

Some combination of:

1) Panda, which redirected hundreds of millions in revenue from some content farms to other parties (including, likely, the ether) which do not show up on Google's books

2) Google is being increasingly aggressive about monetizing the Google SERPS. More ads in more places with more prominent billing. Other sites on the Internet have not been aggressively up-monetizing principally because they have less room to do so. Google has a cash cow and they've only really been working one or two of the squeezable portions, somewhat halfheartedly.

3) Google is cannibalizing the organic results for high money verticals, for example with consumer finance comparison products. Why have Citibank pay an affiliate $200 to buy $160 of AdSense ads to pay Google ~70 when Citi is perfectly happy to pay Google $200 directly?

4) Routine optimization works. Google+ gets all the ink, but Google is keenly aware that they have two products: core search and AdWords/AdSense. If you thought Circles got some programming chops thrown at it, pretend a 1% improvement was worth billions and you had infinite R&D resources.

5) Something else entirely.

Re: The Massive Mystery In Google's Finances

#10

Post by rjd » Fri, Jul 15, 2011, 9:51 AM UTC

binarymax wrote: post #2

This is a wild guess, but what about partner sites' changes also having an effect? The NYT implemented a paywall - possibly resulting in a significant reduction in adsense income?

Having worked recently for a large media company (controlling half the TV, radio, and a sizable chunk of online news to an entire country) we had very close ties to Google i.e. there salesmen where constantly knocking and begging us to use there products. Direct dial numbers to peoples offices etc...

Anyway the thing is adsense would pay anywhere from 2%-10% the value of an advertising campaign which our sales team could source, and if it was a true multi-media campaign across radio, tv ,online Google revenues across the whole network for a month wouldn't even ad up to one sale. Even a standard interactive take over would pay in one week on one site what adsense would for a whole month.

So it was considered a last choice to have adsense on anything, even with foreign exchange rates making the adsense payouts more valuable. Infact we often ran house ads in favour of them as it was considered better value to self promote than run lower return ads.

So I wouldn't be surprised to see lots of other partners taking a similar stance in a tough economic climate by chasing after better returns than Google can offer.

(and yes we had our pages fine tuned for ad sense. We had our SEO team working very closely with Google trying to get things running at highest efficiency/return).

EDIT: If our sales teams figures seem high compared to Googles payouts it would relate to our position in the market and audience. Our sales teams could naturally haggle a far greater rate than smaller websites could.