Comments on: Why Google’s Partners Should Be Worried

By: Soobi 'Makhongoana

Soobi 'Makhongoana — Tue, 31 Mar 2009 15:32:19 +0000

I do get some of the points being discussed here and i appreaciate individaul opinions. But how does Google make money given so many web ads and which revenue models does it use? Surely one revenue model has gone through transition since Google’s birth, which model is that?

By: Vlad

Vlad — Tue, 21 Oct 2008 18:28:00 +0000

Om, first I had a trouble understanding your point. Then I read the chart from right to left and everything became clear :)

@JohnC, you have to have a substantial volume of traffic to really benefit from chitika or proximic. My personal experience haven't been so bright with them whereas AdSense keeps bringing in steady income.

By: Rednod » The other reason startups need to tighten their belt

Rednod » The other reason startups need to tighten their belt — Mon, 20 Oct 2008 15:46:54 +0000

[...] that’s in decline. Paid search is the only form of advertising that seems to work, and Google’s sharing less of that with its partners. If you’re smart enough to have a real business (after all, sales is the missing piece of most [...]

By: Krizė? Kokia krizė? : nežinau.lt

Krizė? Kokia krizė? : nežinau.lt — Mon, 20 Oct 2008 12:12:04 +0000

[...] protingesnius. :) Tiesa, yra ir perspėjimų, kad Google augimas yra pernelyg egoistiškas – bendrovėms partneriams nubyra vis mažiau pinigėlių. Kitas akmuo po kaklu – klampios derybos su JAV teisėsauga dėl reklamos sutarties su Yahoo!. [...]

By: Is Google Reducing Their AdSense Payouts & Increasing Their Take? » RyanSpoon.com

Sun, 19 Oct 2008 16:21:43 +0000

[...] Malik’s “Why Google’s Partners Should Be Worried” is by far my most interesting read of the last few days specifically because it’s a [...]

By: JohnC

JohnC — Sat, 18 Oct 2008 03:37:50 +0000

There are alternative to AdSense. If you’re a publisher, you should really wonder why you’re still with AdSense. You’re certainly loosing substantial revenue. Check chitika.com or proximic.com and put yourself in control of your revenue stream.

By: Paul

Paul — Fri, 17 Oct 2008 20:50:53 +0000

Actually, Google is using more and more of its market power to kill or divest its former parters. Search sites? Toolbars? Browsers? Parters of yesterday were crossed over by Google consistent change of policy once market domination is a sure fact.

Plus who knows how much money they gave back to Adsense "partners" anyway. They can change that % to all self served Adsense users and increase their margin then next day!

Google with its genius and great products is behaving exactly like Microsoft in the 90's. Don't do evil they said. Maybe to Googler's moms?

By: Om Malik

Om Malik — Fri, 17 Oct 2008 16:33:55 +0000

@valleyguy

interesting and very valid point. we shall soon find out when time warner reports its earnings.

@ronald, the google share of total search market is going up and that alone is good enough for the "google sites share ;-)." I still think the ads on the gmail etc are going up and actually at times are more effective and relevant, even if tad creepy.

By: valleyguy

valleyguy — Fri, 17 Oct 2008 15:23:43 +0000

Google’s biggest TAC payments go out to AOL and Dell. I think AOL is declining its userbase and hence a significant decline in that payout. The dell payout might have declined due to declining sales as well?

By: Ad Manager

Ad Manager — Fri, 17 Oct 2008 14:49:44 +0000

As suggested and done by many advertisers, turning off or heavily tune content network ads since they’re low in quality. Advertisers has to bid more to be on Google’s properties.

By: ronald

ronald — Fri, 17 Oct 2008 14:02:02 +0000

Questions: "shifting more of its advertising inventory to its own pages", what are those pages. Is it mail and apps, so if Google gets more users the ads they put on partners go down? Or what is the relation? But shouldn't the ads on mail for example get lower click through rates? When I'm reading mail I'm not clicking any where. Let alone pay attention to any ad.
See our discussion about the Nielsen report: What If You Ran an Ad, and Nobody Saw It?
Which would be bad for Google in the long run.

By: Om Malik

Om Malik — Fri, 17 Oct 2008 12:51:36 +0000

@C and @Svetlana

I think you raise very valid questions. I am not sure if people are shying away from partner sites, because it is hard to tell.

@C your question, "Are they intentionally discounting partner clicks since they have enough inventory on Google-owned sites to direct the traffic there?" is exactly the thought that prompted me to write this post, as I outlined earlier.

My view is that given that the partner share is essentially flat while Google's share is up: that means Google is shifting more of its advertising inventory to its own pages where it doesn't have to share the goodies with partners. its own pages have no content cost and hence are better in terms of making money.

I have talked to a few partners in the past and they are all saying that Google has been slowly squeezing their share. I shouldn't expect anything else - Google has to keep up the revenue growth game or its whole game falls apart. it spends too much money and it needs to in order to stay ahead of microsoft. so in turn it needs to make a ton of money -- whatever it takes.

By: Andy Gongea

Andy Gongea — Fri, 17 Oct 2008 10:13:29 +0000

Good point of view Om.

By: Svetlana Gladkova

Svetlana Gladkova — Fri, 17 Oct 2008 07:19:26 +0000

Om, absolutely valid question but I think there are two scenarios here. One of them is negative for publishers: Google pushes its own ad-supported services harder at users and continues to increase Google sites’ revenues with this. But there is another scenario here as well: right now publishers often seek to work with CPM ad networks that could very well face problems as advertisers want to see better measurable ROI that is better delivered by CPC, not CPM – so publishers get fewer CPM impressions and more impressions processed by defaults (often Google Adsense). So publishers start to rely on Adsense more and the publishers’ share grows. I’m not sure which variant turns into reality for now but I think both are quite possible.

By: Google’s Core Search and Advertising Businesses Healthy in Q3. What’s Next? | Profy | Internet news and commentary

Fri, 17 Oct 2008 07:01:11 +0000

[...] 30% of total revenues. Google paid $1.33 billion to its publishers in the third quarter. I believe Om Malik has all reasons to suggest Google’s publishing partners should be worried watching Google getting less dependent on our [...]

By: C

Fri, 17 Oct 2008 03:40:14 +0000

Om, how do you interpret the flat revenue growth from partners?

Is Google focusing on higher quality partners?

Maybe advertisers are shying away from sites in Google's network?

Are they intentionally discounting partner clicks since they have enough inventory on Google-owned sites to direct the traffic there?

I'm not sure if flat partner revenue is a neutral, bearish or bullish development.