Google Makes It Look Easy to Make Money

According to its most recent earnings call, Microsoft continues to lose a lot of money from its online operations — almost three-quarters of billion dollars last quarter alone (via Business Insider).

Meanwhile Google made $2.51 billion in net income on more than $9 billion in revenue last quarter (NY Times). What’s the secret? Advertising! Search ads represent 97% of Google’s total revenue. (Fun infographic at Wired).

Since many of those ads run on other people’s sites — publishers that participate in Google’s AdSense program — I got to wondering how much of Google’s advertising bounty they share with the rest of the ecosystem. According to The Next Web:

“Through its AdSense programs, Google’s partner sites generated revenues of $2.48 billion, or 28% of total revenues, in the second quarter of 2011, representing a 20% increase from second quarter 2010 network revenues of $2.06 billion. The Internet behemoth shared $2.11 billion with advertising partners this quarter, which is 24% of its income from advertising, and $1.75 billion of that number was paid out to Adsense partners.”

Does that mean total AdSense revenues for the quarter were $2.48 billion plus $1.75 billion, or $4.23 billion? If that’s the case, Google is keeping 59% of revenue from ads on their partners’ sites, and partners get 41%.

  1. # Alex said: July 26th, 2011 at 9:43 am

    Hi Chas,

    Goog takes approximately 30% cut from each ad click on a publisher site. The publisher takes approximately 70%.

    The reason the numbers are skewed is that on-google-search-page ad clicks bring in more for google. But that has nothing to do with site publishers.

  2. # Chas said: July 26th, 2011 at 10:00 am

    Alex–Are you counting the 15% (or so) they take off the top for “ad serving fees”? I think Google is keeping much more of the revenue than 30%.

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