May 25, 2010

Google Discloses Adsense Revenue Splits

Internet search giant Google Inc. disclosed on Monday one of its financial secrets, revealing how the company splits revenue with Web sites that display its online ads.

Google said such Web sites and makers of online content receive more than half the revenue from AdSense advertising deals. 

The company disclosed the information "in the spirit of greater transparency," wrote Neal Mohan, Google's vice president of product management, in a blog post.

"We hope this additional transparency helps you gain more insight into your business partnership with Google. We believe our revenue share is very competitive, and the vast number of advertisers who compete to appear on AdSense sites helps to ensure that you're earning the most from every ad impression," Mohan said.

AdSense for Content is Google's tool for generating revenue from advertising posted next to online content, while AdSense for Search makes money from custom Google search engines incorporated into Web sites.

However, AdSense for Content generates the "vast majority" of revenue, with publishers having received 68 percent of the Content advertising money they brought in, Mohan said.

Meanwhile, AdSense for Search partners received 51 percent of the revenue brought in by advertising displayed next to results of Internet searches at their Web sites.

"For example, you would receive $68 with AdSense for content for $100 worth of advertising that appeared on your site. If another ad network offers an 80% revenue share, but is only able to collect $50 from ads served on your site, you would earn $40. In this case, a higher revenue share wouldn't make up for the lower revenue yield of the other ad network," Mohan said.

Google said its share of the revenue represents the company's costs, which include research and development of search and AdWords technologies.

"Of course, we can't guarantee that the revenue share will never change (our costs may change significantly, for example), but we don't have any current plans to do so for any AdSense product," said Mohan.

"Over the next few months we'll begin showing the revenue shares for AdSense for content and AdSense for search right in the AdSense interface."

Last month, Mountain View, California-based Google reported a 37 percent increase in its first quarter net profits.

Net profit in the quarter that ended on March 31 was $1.96 billion, compared to $1.42 billion dollars in the same quarter a year ago, the company said. Revenue rose by 23 percent to $6.8 billion during the quarter, "driven by strength across all major verticals and geographies," said Patrick Pichette, Google's chief financial officer.

Google's revenue from pay-per-click online advertising increased 15 percent from the same quarter last year, the company said.


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