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 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%.
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!
His conclusion will likely ring true with a lot of "small publishers" (and bloggers). Many times in the last 6 months, I've heard from people who noticed an apparent declining slice of the pie in their monthly AdSense earnings some time ago.
Some have theorized that Google purposely gave us a larger slice in the "early days" to help accelerate adoption of AdSense and cement their position as the reigning monopoly. Then, months before the big IPO, the began to slowly keep more and more of the pie for themselves.
True or not, everyone seems to agree that we could really use some competition in this business.
Posted by jzawodn at February 06, 2005 05:33 PM
How silly. A 80 to 77% equals "evil"? You people are just stooping to Google-bashing. My earnings (and those of many others I know) have increased a lot recently.
Google needs competition? It DOES. Except from, uh hello, Yahoo.
Pathetic.
What we really need from Google is openness. They can pay me 97%, 65%, or whatever, and give me a contract that specifies that amount, and I'll be happy.
The other ad companies I use pay 50% to 65%. So Google's payout percentage is great, but the fact that we have to reverse-engineer their SEC filings to find out what that percentage is is pathetic.
I have only seen the amount made go up over time - and that is on decreased views in some cases with my sites. That would appear to go against what is being argued here right?
I am not convinced the argument made here is a valid one, but would certainly be interested in hearing more.
The most likely explanation is an increase in the ratio of standard publishers vs. premium publishers.
By the way Google's TAC that you are quoting from SEC reports - is an average across all networks - AOL and ASKJ included.
To the small publishers (eg bloggers) the TAC is much lower - 30-40%
Do no evil - yeah, right...
As they add more and more small sites of course the smaller sites are going to get a smaller cut that Ask Jeeves or AOL. Really no surprise there.
Also I am sure it is a ton more work to maintain thousands of content partners than just a few major search partners.
Additionally many people opted out of content distribution due to lower ROI than search. To help compensate for the often lowered implied demand in content and onslaught of poor quality content ad sites they introduced smart pricing which autodiscounts the content ad prices as compared to search ads.
