Google is NOT Reducing Share of AdSense Publishers
By on January 26th, 2010

Google does not disclose the percentage of revenue that it shares with AdSense publishers. However, Amit Agarwal from Digital Inspiration has come with some clever arithmetic to deduce the revenue share being offered by Google.

Google-Adsense-Revenue-Share-Decrease

Digital Inspiration based its calculations on the quarterly earnings report released by Google. The report has two sections – Google Network Revenues and Traffic Acquisition Costs. While the former reflects the amount Google earned from AdSense, the later tells us how much it paid to AdSense publishers. Digital Inspiration used this information to calculate the percentage share paid by Google to publishers. The share has decreased from 75.0% in Q1 2009 to 72.1% in Q4 2009. If true, this is indeed a worrying trend for publishers. However, the problem is that there is a big hole in this logic.

Google-Adsense-Revenue-Share

There is a logical explanation to the declining revenue share, which does not involve “Google is becoming evil”. Google does not completely rely on publishers for eyeballs. AdSense ads are displayed in several major Google initiatives including Google Search, YouTube and Gmail. Obviously, the traffic acquisition cost associated with in-house page views is zero, since Google would be paying itself.

Over the past year, Google has managed to steadily increase page views to various Google projects. Because of this, Google’s reliance on publishers has decreased. Publicly available stats also back this up. For example, YouTube crossed 1 billion page views per day in October 2009.

YouTube-Growth
Rise of YouTube (via Compete)

With Google aggressively expanding its portfolio, traffic acquisitions cost’s percentage will continue to decline. We are not claiming that Google isn’t reducing the AdSense revenue share. We simply believe that we don’t have sufficient data to come to any conclusions.

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Author: Pallab De Google Profile for Pallab De
Pallab De is a blogger from India who has a soft spot for anything techie. He loves trying out new software and spends most of his day breaking and fixing his PC. Pallab loves participating in the social web; he has been active in technology forums since he was a teenager and is an active user of both twitter (@indyan) and facebook .

Pallab De has written and can be contacted at pallab@techie-buzz.com.

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