Traffick - The Business of Search Engines & Web Portals
Blog Categories (aka Tags) Archive of Traffick Articles Our Internet Marketing Consulting Services Contact the Traffickers Traffick RSS Feed

Friday, April 17, 2009

Google Revenues: What's Up? What's Down?

Reading Google's financial summary for Q1, it may be worth looking slightly more closely at what is still driving the company's growth, and what is finally accounting for a hint of weakness in the GOOG's overall profit picture. One thing that seems clear right off the top is that improved profitability has come as a direct result of responsible cost-cutting activities and decreased headcount, after a long run of breakneck growth.

All comparisons here are year-over-year for Q1 of 2009 vs. Q1 of 2008.

What's up?

The growing areas are as follows.

  • International revenues. They make up 52% of Google's total revenues now, as compared with 50% in Q1 of 2008.
  • Total paid clicks. Up 17% year-over-year. This doesn't break out search vs. network.
  • Google sites revenues overall. This is extremely tricky because it doesn't prove that Google Search revenues are up significantly. Other properties, including the money-losing YouTube, contribute to this year-over-year growth number. And more recently there is weakness here. There is growth year over year but a sequential decline from Q4 to Q1.

What's down?

  • Click prices in the U.S. No specifics given, but doing the math, there is weakness in the auction and prices are no longer rising on many keywords.
  • Network revenues. Partner revenues aren't growing even though total clicks may be growing slightly. This is down 3% year over year and sequentially from Q4 to Q1. There seems to be both a lack of growth in the network and weakness in click prices; more so the latter, perhaps. Given that there is more room for growth in the network than on the relatively finite Google-owned properties front, this is disappointing news for Google. It may be too early to start pointing to flaws in Google's network technology and its approach to partnerships here, especially given the potential for their integrated DoubleClick division to launch new initiatives. If we're still seeing no growth by Q1 of 2010 then it may be panic time, and Google's ad serving competitors may be emboldened to take further share from them.
  • UK revenues. These are down year-over-year. It appears that Google has broken out this particular item because it's their second-strongest national market behind the U.S. It would be interesting to see financial numbers for other markets, but it's unlikely we'll see these anytime soon.
Despite massive continued profitability, Google's Q1 profits are proof, at least, that the company lives in a finite world. Until investments in new lines of business lead to growing standalone businesses, its financial fate rises and falls with the ups and downs of click prices and search behavior on Google-owned properties and network partners. The fast growth phase is drawing to a close, but certainly there is lots of room for continued innovation in the space. What's possibly most impressive is that Google has managed to grow search advertising to this point without alienating finicky users.

Labels:

Posted by Andrew Goodman




View Posts by Category

 

Speaking Engagement

I am speaking at SMX West

Need Solid Advice?        

Google AdWords book


Andrew's book, Winning Results With Google AdWords, (McGraw-Hill, 2nd ed.), is still helping tens of thousands of advertisers cut through the noise and set a solid course for campaign ROI.

And for a glowing review of the pioneering 1st ed. of the book, check out this review, by none other than Google's Matt Cutts.


Posts from 2002 to 2010


07/2002
08/2002
09/2002
10/2002
11/2002
12/2002
01/2003
02/2003
03/2003
04/2003
05/2003
06/2003
07/2003
08/2003
09/2003
10/2003
11/2003
12/2003
01/2004
02/2004
03/2004
04/2004
05/2004
06/2004
07/2004
08/2004
09/2004
10/2004
11/2004
12/2004
01/2005
02/2005
03/2005
04/2005
05/2005
06/2005
07/2005
08/2005
09/2005
10/2005
11/2005
12/2005
01/2006
02/2006
03/2006
04/2006
05/2006
06/2006
07/2006
08/2006
09/2006
10/2006
11/2006
12/2006
01/2007
02/2007
03/2007
04/2007
05/2007
06/2007
07/2007
08/2007
09/2007
10/2007
11/2007
12/2007
01/2008
02/2008
03/2008
04/2008
05/2008
06/2008
07/2008
08/2008
09/2008
10/2008
11/2008
12/2008
01/2009
02/2009
03/2009
04/2009
05/2009
06/2009
07/2009
08/2009
09/2009
10/2009
11/2009
12/2009
01/2010
02/2010
03/2010
04/2010

Recent Posts


Page Zero Media Hits NYC!

Revenge of the Analysts

Perception, Not Reality, Could Topple Google in Se...

Hey, Yelp -- Welcome to the Concept of Dialogue!

GMail Developers Obsessed with Relationship Faux-P...

Whither Twitter Under Google?

Lululemon April Fools Home Page: Top Two Responses...

Is Guy Kawasaki Singlehandedly Ruining Twitter? (P...

5 Conference Truisms Still Apply: SES New York Wra...

Straight Talk on Click Fraud

 


Traffick - The Business of Search Engines & Web Portals

 


Home | Categories | Archive | About Us | Internet Marketing Consulting | Contact Us
© 1999 - 2013 Traffick.com. All Rights Reserved