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Summary:

Google’s earnings are on everyone’s lips – and with a reason. Read Google By The Numbers over at Business 2.0 website, and you will be impressed. What caught my eye was the amount of money Google generated from what it calls the “Google Network Sites,” and […]

Google’s earnings are on everyone’s lips – and with a reason. Read Google By The Numbers over at Business 2.0 website, and you will be impressed. What caught my eye was the amount of money Google generated from what it calls the “Google Network Sites,” and how it is basically helping foster a financial ecoystem. Google calls it “traffic acquisition costs.”

Intrigued, I looked up some of the SEC filings and discovered that for past four quarters Google has been paying more money every quarter to the affiliates. However, TAC as a percentage of advertising revenues generated by network sites is declining. For instance in quarter ending June 30, 2004, the company had paid out 80% of the revenues generated by its network. In quarter ending Sept 30, 2004, it was down to 79% and now in the December 2004 quarter, that number was down to 77%.

Traffic Acquisition Costs, the portion of revenues shared with Googles partners, increased to $378 million or 77% of Google Network revenues. This compares to total payments to partners of $216 million in the fourth quarter of 2003, or 85% of Google Network revenues.

Now one way to read it is that, with their dominance on the contextual ad-market complete, they are doing the slow squeeze on the publishers. I hope not, since do no evil is their motto!

  1. GOOG – Mad. Ave probably has a plan to “solve” the Google “problem.”

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  2. Google Hoarding the Pie?

    Om Malik looked up some of Google’s SEC filings and found the following: Google has been paying more money every quarter to the affiliates. However, TAC as a percentage of advertising revenues generated by network sites is declining. For instance in q…

    COMMENT:
    AUTHOR: Jon

    Unfortunately, Google may be playing a darker, more sinister role in American society that merely squeezing advertisers: it is becoming a corporate censor.

    Last year, the Google Adwords team discontinued all advertisements placed by Perrspectives.com due to “unacceptable contentâ€? on the site that includes “language that advocates against an individual, group or organization.â€? That may or may not have been blatant bias against liberal viewpoints. There can be no doubt, though, that the current Google editorial guidelines, evenly applied, would bar almost any newspaper, magazine, opinion journal, political party, advocacy campaign or even religious organization from advertising on its site. And that puts Google dangerously at odds with core American values of free speech and assembly.

    For the full story, see:

    “Google’s Gag Order: An Internet Giant Threatens Free Speech”

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