DoubleClick

In the last year, Google has taken almost a third of the search revenue market share that they did not have before -- per recent company reports.

• In other words, Google's search revenue share increased from 90% in 4Q08 to 93% in 4Q09.
• To understand the math, supporting numbers,and links behind this estimate see the end of this post.

Google's 4Q09 earnings release also shows Google is exercising its market pricing power at the expense of web publishers by reducing the revenue share percentage shared with web publishers (i.e. raising prices) because web publishers have no where else to go; please see the illuminating analysis by Amit Agarwal of Digital Inspiration blog who deserves credit for this important insight.

January 27, 2010

For Immediate Release

Contact: Scott Cleland

703-217-2407

Media@GoogleMonitor.com

GoogleMonitor.com Launches Today

Google generated probably the strongest annual revenue growth, 17%, of any large U.S. company this past quarter. 

• Given that Google is exceptionally non-transparent, the minimal guidance and insight that Google is required to provide as a public company always provides a rare glimpse into what is really going on at Google. 

What are the big takeaways from the earnings call?

First, Googleopoly continues to gobble revenue market share at a voracious rate because we know Google's revenues are up 17%, and Google's only significant competitors, Yahoo and Microsoft are continuing to lose ground, (as Yahoo is expected to report a revenue decrease on Tuesday so its search revenues can be assumed to badly lag Google's 17%, and Microsoft Bing's modest search share gains are not keeping up with Google's torrid search growth in a weak economy.)

Google unwisely chose to trumpet Apple's purchase of Quattro as evidence that the mobile advertising market is competitive -- and by implication that the Google acquisition of Admob therefore should be approved.  

First, the FTC surely remembers that Google CEO Eric Schmidt indignantly said only last year that Google and Apple were not competitors, so there was no reason for Mr. Schmidt to have to step down from Apple's board, despite an FTC antitrust investigation into potentially illegal Google-Apple inter-lockiing directorates.

Google, you have a problem. The verdict of your biggest customers is in -- and you've been found guilty of not pursuing your clients' best interests.

• The ANA, the nation's largest association of advertisers and marketers representing ~9,000 brands, just wrote the DOJ formally recommending that the DOJ oppose the Google-Yahoo advertising partnership as anti-competitive.  

I have two big takeaways for you:

Google's dominance of the Internet's business model for monetizing content only grows.

Knol, Google's newly announced online publishing service, is an ominous direct competitive threat to traditional newspaper/magazine/journal publishers, NOT a challenge to Wikipedia as many in content circles naively and wishfully think.

Growth: 39% YoY revenue growth on a ~$20b base, in a slowing global economy is impressive. Hats off to Google. Lots of network effects at work as Google sites revenue grew 42% YoY.

Tone: I did note the slightest whif of humility this quarter that external factors had some effect on Google's business, in stark contrast to last quarter's more bold statement that Google saw no effect of the external market or economy on Google's business.  

DoubleClick: As I suspected, CEO Schmidt said in an answer to a question, that Doubleclick was going well but that he would not break out any information -- in Google's well-established sorry-Charlie-style... no insight or guidance for you... The only thing interesting that was said about DoubleClick was indirect, in that Sergey Brin said that the big problem in display is that it is highly-fragmented." Couple that with CEO Schmidt indicating that Google was only months away fom offering a one-stop advertising solution, one can surmise that Doubleclick will indeed prove to be a material growth kicker to help Google fight off some of the natural drag of the law of large numbers.  

Kudos to Danny Dover's tremendous seomoz.org post: "The evil side of Google? Exploring Google's user data collection" where he comprehensively assembles all the types of personally-sensitive-information that Google routinely collects on Internet and Google users.

• Mr. Dover also exhibits exceptional clarity of thought in describing Google as "first and foremost a data company" despite conventional wisdom that describes Google as a search engine company or despite Google's description of themselves...as a technology company. 

Why is J. Edgar Hoover/J. Edgar Google an apt analogy? 

In entering the web measurement business for free, Google is literally killing many birds with one stone -- ComScore, Nielsen, Google's third party accountability, and any notion that Google does not have a badly conflicted business model. 

The Wall Street Journal article by Emily Steel: "Google to offer tool to measure web hits" is a solid and illuminating article that starts to get at the serious conflicts of interest at work here.

First, did any of you connect the dots that Google's press leak crushed ComScore's stock today (which is down over 20% at this writing) ... the same ComScore that investors used to drive Google's stock down in 1Q08 out of fear that click rates were down with the economy?