Google money machine returns to overdrive

'An extraordinary end to a roller coaster year'


Google's top secret money machine returned to overdrive during the fourth quarter, with the web giant reporting a 17 per cent leap in revenue from a year ago.

In October, as the company announced its Q3 earnings, Mountain View chief Eric Schmidt told the world that the worst days of the worldwide recession were over, and clearly, they are - at least for Google.

"This was a very strong quarter for Google and an extraordinary end to a roller coaster year by any measure," Schmidt said during a conference call with reporters and industry analysts.

After Q3, Google also said it planned to once again boost its spending, acquiring more companies and hiring more employees, and today, Schmidt confirmed this will continue through 2010. "It was clearly the right decision," he said, adding that the company will invest in more engineers and more sales staff in "key areas."

During the economic Meltdown, Google expanded "ad coverage" on its web-dominating search engine, letting more ads onto more pages. Throughout the recession, revenues expanded sequentially during all but one quarter, and that quarter - Q1 2009 - was still an improvement over the previous year.

That quarter was also profitable, after the company made some significant spending cuts.

But now that the economy is recovering - and big players are spending more - the company has turned the coverage dial the other way. According to AdGooRoo - a search marketing consultant that tracks search ads from a network of servers across the globe - Google banned about 30,000 advertisers from its AdWords platform at the beginning of December.

As Google shrunk coverage, aggregate paid clicks - across Google sites as well as AdSense third-party sites - leapt 13 per cent from the previous year. And the average cost per click jumped 5 per cent. This led to revenues of $6.67 billion, up from $5.7bn in the fourth quarter of 2008, and profits climbed to $2.19 billion, a 35 per cent leap.

Google sites generated revenue of $4.42bn, 66 per cent of the total, while partner AdSense sites generated $2.04bn, 31 percent of the total.

The company's traffic acquisition costs (TAC) - what it pays to AdSense sites - were 27 per cent of its revenues in the fourth quarter, just as they were in Q4 2008. During today's call, an analyst said that many advertisers are claiming that their individual slice of the pie is shrinking, and though chief financial officer Patrick Pichette seemed to acknowledged this trend - at least during the fourth quarter - he downplayed its significance. "There's no big surprise there, and we continued to have greater partnerships with our AdSense partners," he said. ®

Broader topics


Other stories you might like

  • North Korea pulled in $400m in cryptocurrency heists last year – report

    Plus: FIFA 22 players lose their identity and Texas gets phony QR codes

    In brief Thieves operating for the North Korean government made off with almost $400m in digicash last year in a concerted attack to steal and launder as much currency as they could.

    A report from blockchain biz Chainalysis found that attackers were going after investment houses and currency exchanges in a bid to purloin funds and send them back to the Glorious Leader's coffers. They then use mixing software to make masses of micropayments to new wallets, before consolidating them all again into a new account and moving the funds.

    Bitcoin used to be a top target but Ether is now the most stolen currency, say the researchers, accounting for 58 per cent of the funds filched. Bitcoin accounted for just 20 per cent, a fall of more than 50 per cent since 2019 - although part of the reason might be that they are now so valuable people are taking more care with them.

    Continue reading
  • Tesla Full Self-Driving videos prompt California's DMV to rethink policy on accidents

    Plus: AI systems can identify different chess players by their moves and more

    In brief California’s Department of Motor Vehicles said it’s “revisiting” its opinion of whether Tesla’s so-called Full Self-Driving feature needs more oversight after a series of videos demonstrate how the technology can be dangerous.

    “Recent software updates, videos showing dangerous use of that technology, open investigations by the National Highway Traffic Safety Administration, and the opinions of other experts in this space,” have made the DMV think twice about Tesla, according to a letter sent to California’s Senator Lena Gonzalez (D-Long Beach), chair of the Senate’s transportation committee, and first reported by the LA Times.

    Tesla isn’t required to report the number of crashes to California’s DMV unlike other self-driving car companies like Waymo or Cruise because it operates at lower levels of autonomy and requires human supervision. But that may change after videos like drivers having to take over to avoid accidentally swerving into pedestrians crossing the road or failing to detect a truck in the middle of the road continue circulating.

    Continue reading
  • Alien life on Super-Earth can survive longer than us due to long-lasting protection from cosmic rays

    Laser experiments show their magnetic fields shielding their surfaces from radiation last longer

    Life on Super-Earths may have more time to develop and evolve, thanks to their long-lasting magnetic fields protecting them against harmful cosmic rays, according to new research published in Science.

    Space is a hazardous environment. Streams of charged particles traveling at very close to the speed of light, ejected from stars and distant galaxies, bombard planets. The intense radiation can strip atmospheres and cause oceans on planetary surfaces to dry up over time, leaving them arid and incapable of supporting habitable life. Cosmic rays, however, are deflected away from Earth, however, since it’s shielded by its magnetic field.

    Now, a team of researchers led by the Lawrence Livermore National Laboratory (LLNL) believe that Super-Earths - planets that are more massive than Earth but less than Neptune - may have magnetic fields too. Their defensive bubbles, in fact, are estimated to stay intact for longer than the one around Earth, meaning life on their surfaces will have more time to develop and survive.

    Continue reading

Biting the hand that feeds IT © 1998–2022