Google’s share of ad spending: 2.66 percent

June 29, 2009 | Paul Boutin | Comments | |

googlegraphA set of charts by Search Engine Land contributing editor Greg Sterling show that while Google seems like a gigantic corporation, its revenue isn’t that big, even for a tech company. To boil down Sterling’s article: Google’s revenue is one-fifth that of IBM, Verizon or AT&T. Even Microsoft collects three times as much per year: $60 billion against Google’s $21 billion.

The New York Times has a report on Google’s we’re-not-that-big defense against government intervention. But Sterling’s charts are a better read. The chart above shows how small Internet advertising still is. Google’s AdWords and AdSense programs have grown the market for online ads, rather than just capturing a portion of the pre-existing pie. Yet Google’s 30 percent share of U.S. online ad revenue — a bit over $21 billion — is less than three percent of total U.S. advertising. Many companies still balk at advertising online, or at committing more of their ad budgets to Web ads.

One reason is that for higher-priced items, shoppers still want to talk to a human being rather than one-click a $1,000 purchase. RingRevenue, a Santa Barbara-based startup, claims to have technology to connect online campaigns and over-the-phone sales to track which ads resulted in what sales. Surely Google has its own solutions under development.

Meanwhile, Sterling’s charts make a great case against Google’s alleged monopoly of the Internet. The company has an enormous presence both online and in pop culture. Yet it takes in only a sliver of the spending in the market it serves. That’s not a monopoly, it’s a call to grow 10 times bigger.

[Image by Search Engine Land]

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About the Author, Paul Boutin

Paul (paul@venturebeat.com) covers Apple & the iPhone, social networks & social media, digital music & video, and any crazy Internet story. Paul wrote and edited for Valleywag from 2006-2008, after several years with Wired magazine and Slate. He writes regularly for The New York Times' technology section and sometimes for Wired and The Wall Street Journal. He studied computer science at MIT in the early 1980s, and worked as a software developer and network administrator for 15 years before becoming a professional writer. Follow him on Twitter at @paulboutin, and follow VentureBeat on Twitter at @venturebeat.

  • Name
    sdfsdf
  • Lame Argument
    When was it that gov'ts started putting a revenue mark on companies before they could be targeted for being considered a monopoly?

    They have been using that small percent of all ad-spend argument for a few years now.., its not gonna fly.

    Its like MS saying they should not be considered a monopoly b/c oracle and IBM have huge revenue a sell a lof of software.
  • People trying to defend monopolies always try to slice the pie in a way that makes look like the monopolist is in fact facing lots of competition. It never works, because it's not true.

    Your argument that Google has only 2.66% of the overall market, which is very big, just doesn't work. If it did, regulator and consumers would need to be happy with one TV network owning 25% of the total ad revenue, one radio station owning another 25%, one newspaper owning the third and Google owning the rest.

    I am a great fan of Google, but it's 30% market share of online advertising threatens innovation and stifles growth. No AdSense user can complain because Google can *arbitrarily* turn off their access to AdSense, which would be very damaging to a small or medium size web business.

    To suggest that Google should be regulated with respect to its share of total advertising is, I'm afraid, arrant nonsense.
  • Wow, this incredible. Thanks Google for its wonderful search engine ;-)
  • The chart above shows how small Internet advertising still is. Google’s AdWords and AdSense programs have grown the market for online ads, rather than just capturing a portion of the pre-existing pie.
  • The chart above shows how small Internet advertising still is. Google’s AdWords and AdSense programs have grown the market for online ads, rather than just capturing a portion of the pre-existing pie.
  • xueerdodo
    The chart above shows how small Internet advertising still is. Google’s AdWords and AdSense programs have grown the market for online ads, rather than just capturing a portion of the pre-existing pie.
  • xueerdodo
    Tom Coughlin thought his team had righted itself