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Google reported record revenues of $1.256 billion

         

markus007

8:23 pm on Apr 21, 2005 (gmt 0)

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Google reported record revenues of $1.256 billion for the quarter ended March 31, 2005, up 93% year over year. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs or TAC, the portion of revenues shared with partners.

Revenues generated on Google's partner sites, through AdSense programs, contributed $584 million

TAC -- Traffic Acquisition Costs, the portion of revenues shared with Google's partners, increased to $462 million. This compares to total payments to partners of $271 million in the first quarter of 2004.

Zygoot

9:45 pm on Apr 21, 2005 (gmt 0)

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Google keeps performing very well - their first quarter earnings were about six times higher than last year.

It's funny to see how they turned a loss making business (search engines) into a multi-million dollar business over the last few years.

GeorgeK

10:07 pm on Apr 21, 2005 (gmt 0)

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Probably more appropriate in the Google News category (glad I checked this category first).

[story.news.yahoo.com...]

"This improvement in operating margins was primarily due to decreases in both stock-based compensation expense and TAC (traffic acquisition costs) as a percentage of revenue," Google said.

Could be AdSense revenue shares were quietly lowered? (as TAC went down on a percentage basis)

Visi

10:22 pm on Apr 21, 2005 (gmt 0)

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If I calculated correctly based on the gross numbers published the percentage paid out has remained about the same. Increase is in growth of search ads % against adsense sites (116% vs 75%) Will need to see a few more of the numbers to determine if major shift.

activeco

10:38 pm on Apr 21, 2005 (gmt 0)

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"During the quarter, Google paid $462 million in commissions, referred to as traffic acquisition costs, to partner Web sites that use Google advertising services.
That was a lower percentage of revenue than a year earlier. The drop in costs and a cut in stock-based compensation drove up operating profit margins to 35.2 percent from 23.8 percent. "

So, Adsense share for publishers is definitely lower.

dauction

10:56 pm on Apr 21, 2005 (gmt 0)

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So, Adsense share for publishers is definitely lower.

No it isnt just ask EVA .. he hasnt heard anyone complaning about lower EPC so therefore it isnt true ;)

fischermx

11:06 pm on Apr 21, 2005 (gmt 0)

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So, Adsense share for publishers is definitely lower.

Yahoo, where are you!? :)

ErtaiPT

11:14 pm on Apr 21, 2005 (gmt 0)

10+ Year Member



Well.. at least I make more money buying shares of Google than in my Adsense account :D

Nice afterhours rise, around 9%

Google stocks should be on fire for the next months..

carminejg3

1:12 am on Apr 22, 2005 (gmt 0)

10+ Year Member



this clearly shows what happened to everyones CPM's this quater.....

I think it's time to YAHOO!

because this surly isn't from the two inventers dropping salaries to $1 for $370k

it's only a matter of time before people start sueing to find out what google pays adsense for its cpc... everyone else does it..

fastclick tells you excatly what you'll get so why doesn't google?

ken_b

1:27 am on Apr 22, 2005 (gmt 0)

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this clearly shows what happened to everyones CPM's this quater.....

Everyone?

Maybe many, maybe a lot, but not everyone.

Visi

1:43 am on Apr 22, 2005 (gmt 0)

10+ Year Member



So according to initial figures of $462 m in costs versus $580 revenue thats around 79%. From memory last years numbers were 77-78%. Seems like google costs to partners about the same. The fact they increased margins was due to the search ads revenue rising in greater proportion. Now what we gonna blame lower EPC on...there goes another conspiracy theory:):)

hunderdown

2:44 am on Apr 22, 2005 (gmt 0)



visi, thanks for the actual analysis. Much better than guesses and suspicions.

It's particularly good to have real calculations because I don't see any point to worrying about how much Google is or isn't keeping as their share. Whether we are getting 78% or 75% or even 60% (Warning, hypothetical number only!), we are still doing pretty well out of a system that Google created, that Google runs, and that is extremely easy for us to use. AdSense has more than doubled my income--my energy goes into increasing my earnings, not into fretting about Google.

bnhall

4:39 am on Apr 22, 2005 (gmt 0)

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I think the key point is this:

Total revenue - $1.26 billion. Revenue after subtracting "commissions paid to other websites" - $794.5 million. That means the amount paid out was $465.5 million. Approx 90 days in the quarter means adsense is paying out $5.172 million a DAY.

Now how do I get a bigger share of that?

activeco

5:10 am on Apr 22, 2005 (gmt 0)

10+ Year Member



It's particularly good to have real calculations because I don't see any point to worrying about how much Google is or isn't keeping as their share. Whether we are getting 78% or 75% or even 60% (Warning, hypothetical number only!), we are still doing pretty well out of a system...

So as long as you are satisfied with your G money, there is no problem with the system.

Yes, it is still the best out there, but the keywords here are: unpredictible & uncontrolable; hardly a good business model to rely on for a longer time.

The winning streak for many is already broken.

ncreegan

10:49 am on Apr 22, 2005 (gmt 0)

10+ Year Member



this clearly shows what happened to everyones CPM's this quater...

CPM's high and stable over here for the entire first quarter, and I know I'm not the only one...

I earn about a tenth of what AS brings in through both CJ and LS, and I get monthly phone calls and bonuses. What's good for the GOOG is good for the publisher. Let's see some profit sharing :-)

photo200

12:24 pm on Apr 22, 2005 (gmt 0)

10+ Year Member



Hi guys.

CPC definetely lower.
It definetely means - lower share goes to AS publishers.
How lower - I would say 4 times compare to august last year.

This is the explanation of
Corporate Google : "Cut down of effective costs
(means US :( )".

Waiting for Yahoo will come?
I dont think it will solve the problem.

Only we can do (all of us :) ) - it is reducing ADS space, removing multiple ads and so on.
But this is impossible because for me RIGHT NOW it means lower revenue.

carminejg3

1:01 pm on Apr 22, 2005 (gmt 0)

10+ Year Member



truth is good sites.... don't make as much as adsense sites do...

good site = useful information that uses adsense to help cover cost. (limited clicks)

adsense site = using other peoples title tags, keywords and description to fool search engine s to send them traffic then people only have one place to click.....

I looked at a post here pointing to a site by chris that claims he gets $500 a day in one ebook he sells, well there was 4 adsense ads and a paragraph of content.... thats killing it for the rest of us....

I even almost clicked an ad just to leave the page.

I think yahoo, would be alot more select (well I hope) this way good sites would get a high cpc.

ncreegan

2:10 pm on Apr 22, 2005 (gmt 0)

10+ Year Member



truth is good sites.... don't make as much as adsense sites do...good site = useful information that uses adsense to help cover cost.

I don't support scraping or any site that purely does anything similar, it's bogus, and yet to a certain extent, everything we do is scraping. Look at your own sites; is there truly any unique information on them?

There are no new ideas. There are only new ways of making them felt.

While you may empirically have indeed the best widget site in existence, that doesn't entitle you to a high CPM. Your earnings are based on how good your site is for adsense (and more specifically adwords advertisers), not how good your site is for the world.

It may be a little hard to swallow, but that's how it is. As an advertiser, why should I pay more for your traffic than what it is worth to me?

I think yahoo, would be alot more select (well I hope) this way good sites would get a high cpc.

I hope that scrapers aren't allowed into the program, but it would be a poor decision to award a higher CPC to clicks that are nearly worthless just because they come from a site with good intentions.

Ask any advertiser with any business sense which clicks are more valuable, and they'll say the ones that convert better.

europeforvisitors

5:01 pm on Apr 22, 2005 (gmt 0)



CPC definetely lower.
It definetely means - lower share goes to AS publishers.
How lower - I would say 4 times compare to august last year.

Oh, please. That's like saying "I'm running a fever today, so everybody must be ill." Some publishers are seeing a downward trend in their EPC, others are seeing an upward trend, and others (I'm one of them) are holding steady. Never assume that your own situation is universal.

Also, it's a mistake to assume that a lower cost of traffic acquisition for Google translates into lower payouts for a given publisher (or even for the average publisher). It could just as easily mean that initial guarantees to large "premium publishers" (news sites, portals, weather sites, etc.) have expired. We just don't know. And in any case, one would have to be very naive to think that Google uses a simple percentage split. Site A might get X% per click, Site B might get Y%, and so on, in the same way that sales reps, distributors, dealers, etc. get different commissions or margins depending on their revenues and their perceived value to the company that pays them.

The bottom line is that if you're happy with AdSense, you should stick with it. If you aren't happy, you should consider looking for alternatives that pay better or make you feel more comfortable. You can even try the alternatives and go back to using AdSense if the alternatives don't pan out.

dauction

5:16 pm on Apr 22, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



EuropeforV
Oh, please. That's like saying "I'm running a fever today, so everybody must be ill."

thats rather amusing coming from you because you are the one that has claimed for the past couple months that EPC arent dropping because you dont see everyone complaining about lower EPC.. when in fact people have been complaining left and right .

The issue is ..it hasnt happend to YOU yet..so therefore in your mind it simply dosent exist

ken_b

5:55 pm on Apr 22, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member Top Contributors Of The Month



The issue is ..it hasnt happend to YOU yet..so therefore in your mind it simply dosent exist

I think the issue is more like not everyone is suffering from lower EPC. Based on the posts we see here, some are definitely seeing drops, but not all.

People who are seeing a drop may well be more likely to comment on it.

And just seeing EPC drop doesn't mean a whole lot by itself. Epc can drop and eCPM go up at the same time, if you get well targeted ads that draw enough clicks.

Looking at the whole picture can tell a very different story than if you just look at one part of it.

europeforvisitors

6:04 pm on Apr 22, 2005 (gmt 0)



thats rather amusing coming from you because you are the one that has claimed for the past couple months that EPC arent dropping because you dont see everyone complaining about lower EPC..

dauction, that's simply untrue. I've never claimed that nobody's EPC is dropping; I've merely pooh-poohed the foolish and demonstrably false claims that EPC is dropping across the board.

Misery may love company, but that doesn't justify mispresenting the facts (or other members' posts).

photo200

7:11 pm on Apr 22, 2005 (gmt 0)

10+ Year Member



europeforvisitors

Let's say it is not correctly to offend someone because
You thing you are smarter.

I also did not said anything about your particular revenue

How I can conclude that something wrong with a payout ratio and CPC?

1 USD clicks and higher in September
and 1 cents clicks in April.

Not average! but just simple one click note.

ownerrim

7:14 pm on Apr 22, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



EVA...extra vehicular activity? (roger that, houston)

I think you mean EFV

ncreegan

7:21 pm on Apr 22, 2005 (gmt 0)

10+ Year Member




How I can conclude that something wrong with a payout ratio and CPC?

1 USD clicks and higher in September
and 1 cents clicks in April.

Not average! but just simple one click note.

Tragically flawed logic. Your EPC dropped because the value of the clicks went down.

Or maybe it's a conspiracy.

FromRocky

7:47 pm on Apr 22, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



Or maybe it's a conspiracy.

EPC - Earning per Conspiracy.

photo200

7:57 pm on Apr 22, 2005 (gmt 0)

10+ Year Member



And just in addition what I said -
Lower EPC makes me even better :)
I need to optimize my site, get more traffic and so on.
So generally my revenue is on the same level.
This is just thread about Higher Google revenue
by cutting some specific costs and we are those costs.
:)

hunderdown

8:08 pm on Apr 22, 2005 (gmt 0)