Forum Moderators: martinibuster
"Revenue for the period totaled $1.38 billion, nearly doubling from $700.2 million last year. After subtracting the commissions that Google paid to other Web sites in its advertising network, the revenue stood at $890 million"
- We all know Google has some big partners that are including in their network. But from the above statement it looks like they paid $490 million in "commissions", hence about 1/3 of their revenue went to their partners.
Does that mean for us if we're projecting based on bid price, that about 1/3rd is a good projection number?
In other words if a top paying ad on our network cost $3 in Adwords, could we see $1 from that? On average?
The "funny" part is that the Big G. quadrupled revenues, but investors were selling anyway, as the revenue grow was "slowing down". Still, some project $350 as a "reasonable" stock price for G.
You need to look at the CONTENT NETWORK numbers only.
For previous quarters, folks here have calculated that Google paid out 77-78% to its partners in the content network. That's us. I'd be really surprised to hear that that had changed more than a percentage point or two.
Does that mean for us if we're projecting based on bid price, that about 1/3rd is a good projection number?
no. the $494 million figure is the payout to partners... they call this TAC or traffic acquisition costs. their total revenue was 1.384 billion but this includes money that they earn from their properties (gmail, google.com froogle.com etc).
from the earnings report:
Revenues generated on Google's parnter sites, through AdSense programs, contributed $630 million
so... they paid $494 million for revenue of $630 million which means that the payout rate for this quarter was 78.4%
