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April 18, 2008, 4:42 pm How Big Is Google? Here’s Another Measure

By Saul Hansell
Google

Rory Cellan-Jones, a blogger for the BBC, calculates an interesting statistic from Google’s earnings release Thursday.

Google earned $803 million, about £407 million, in Britain in the first quarter. If you assume that rate won’t grow, that makes £1.6 billion for the year. And since Google’s British earnings are up 40 percent from a year ago, it is a safe bet it will grow.

That means Google will overtake the ITV television network as the biggest seller of advertising in Britain this year, Mr. Cellan-Jones figures. ITV sold about £1.5 billion of advertising last year.

Britain’s biggest commercial television business — the original “license to print money” — is about to be overtaken by an American upstart which only arrived in the UK in 2001.

That should be no surprise. As best as I can tell, Google sells more advertising than any company in the world. This year Morgan Stanley estimates Google’s total advertising revenue will be $21.9 billion. Excluding the payments it makes to companies that display its ads, Google’s total ad revenue will be $15.7 billion.

Time Warner, the largest media company in the world, earned $8.8 billion in advertising revenue last year. Viacom had $4.7 billion in ad revenue last year. I’m still working through the numbers at the other big conglomerates, but it seems clear that none of them sold more than $16 billion in advertising. ...

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Comments (1)

Jardinero1 on April 26, 2008 12:09 PM:

I don't understand the comparison between Google and ITV and TimeWarner and Viacom. It's a non-sequitur. You may as well compare Google to GE or Ford Motor Co; they sell advertising too. Just because one sells advertising, doesn't mean there is any basis for comparison The closest, probably only, non-digital frame of reference for Google's business model is the direct mail business.

One could plausibly argue that ITV and Timewarner and Viacom create a tangible product for sale to consumers. Their product, supposedly, adds value to the culture and the economy. Selling advertising against that backstop is merely one aspect of their business model.

Google engages in a pure rent seeking model of business. It's debatable whether Google adds value to the economy or the culture. Their model is to free-ride over the culture and the economy and give directions to what they have found. Some believe that there is value created there. Maybe so, but in no way is it analogous to ITV, Timewarner, and Viacom.

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