Forum Moderators: martinibuster
What would really be good for us would be another couple of AdSense like services. Right now, my revenue is almost all coming from AdSense. Depending on one company is not great in this economy.
BZ
Maybe I'm just burnt out by the dot-com craziness of a few years back, but it seems like I've seen a lot of good companies with great ethics and business sense ruined by going public.
Back on topic, I have a feeling AdSense would not survive an IPO in its current form. It would probably start being something like Overture's content match (Is that Overture?) where you have to be big to even be let in the door. All the smaller sites with only a few thousand impressions a day would probably be gently (yet forcibly) asked to leave the program.
All the smaller sites with only a few thousand impressions a day would probably be gently (yet forcibly) asked to leave the program.
Why? I would expect the opposite - with shareholders to please wouldn't Google be wanting to maximize revenues?
A small site takes up its own Adsense account with reporting and everything, checks that have to be sent, etc, whereas its income wouldn't be as high to offset those costs. Of course, the system load wouldn't be as high with smaller sites either, so maybe it would balance out.
Overall, it's just a gut feeling I have that once you go public, part of that is ignoring any "little guys." I don't have much concrete to base it on other than Overture's examples.
Okay, call me paranoid. :-)
JK
I'd expect them to dump smaller sites because I'm assuming that maintenance costs of smaller sites is proportionately higher than for larger sites.
Keeping small sites in the program has a couple of benefits off the top of my head:
1- Freezes out competition from getting a foothold.
2- Allows for a shotgun approach to niche coverage. If you don't believe me, ask the webmaster that frequents here and has a site about squids.
though i agree with you, loan.
What I don't understand is, why would a profitable company go public in the first place? You give up a lot of control to shareholders and suddenly the whole philosophy of your company goes away. And for what -- getting a stack of cash? If you're profitable, why do you need it?
Because the current investors (VCs, insiders, etc) want a liquid way to realize their gains. The expectation is that if the market stays somewhat positive from now until the IPO, Google shares will do quite well in the early stages. That's big dough for the current investors.
I think for AdWords and AdSense users, an IPO can only mean good things, at least in the short term.
What I worry about, frankly, is that an IPO may prove damaging to the lauded Google culture. As someone who has several friends who work at Google and has seen Google a bit from the inside, I don't doubt the integrity of Sergey and Larry and so on, but rather, I worry about the pressures put upon them and senior managers to sacrifice long-term thinking for short term profit goals.
Returning to AdSense... I will temper my earlier stated optimism way up in the top of my note here <g>... and suggest that, should Google's culture go awry and Google be less able to attract the consistently stellar employees and generate related buzz... all of Google, AdSense included, may suffer.
And lastly, flip-flopping yet again, I sincerely believe that Google has thought long, and very very deeply about this and related issues, and given its healthy cash pile now, isn't being pressured into making rash IPO decisions :)
Once public, your stock price becomes a factor of forward looking earnings per share projections. It is when you exceed these expecatations or do not meet these expectations that cause fluctuations in stock price.
So what does this have to do with ADsense? Everything. G is becoming dependant on the revenue associated with ad serving off serps. They are generating an insatuable appetite for third party sites and content to show ads in context. As this all important ad serving base grows, so too will G's need to carefully maintain and grow such an off-serp base.
Why? Because if they alter their approach, their earnings projections will be impacted. Public companies *have* to grow to remain successful, specifically in growth industries like technology. Look for G to solidify and grow their ADsense position.
After-all it is ADwords that is the basis for the majority of G's revenue. And ADsense is the most important means by which ADwords revenue will continue to grow. And it must grow for G to be successful as a public company.
All the smaller sites with only a few thousand impressions a day would probably be gently (yet forcibly) asked to leave the program.
No, because a lot of the smaller sites that only get a little bit of traffic make great sense in terms of them only running the ads for a while and after not seeing any money they stop the program because it might take too long to see a check. This is just free money for google, if you think in terms of thousands of smaller sites doing this, it really brings in a lot of money for them.
I am doing about 70k adsense impressions per day, so I am in a little bit different boat and yea, 90% of my site revenue comes from adsense so if investors feel that they need to lower that amount it would really suck for sites like mine.
AdSense's greatest strength is its ability to reach targeted niche audiences. If you're selling pec implants, fireproofing materials for nuclear reactors, foreign-language courses, or Croatian yacht charters, you're more likely to find prospects on special-interest sites with modest to moderate traffic than you are on CNN.com or Washingtonpost.com...just as you're more likely to sell ham-radio antennas to QST Magazine subscribers than you are to readers of The New York Times or Newsweek. Without special-interest sites, AdSense wouldn't be any different from Overture and other traditional PPC advertising networks.
