Google’s Cut? Forty Percent, Baby
Divide the online advertising revenue pool into ten slices. Google devours four all by itself, to the tune of $7.5 billion in the US market so far in 2007.
|Google’s Cut? Forty Percent, Baby|
Break down the numbers, Ashkan Karbasfrooshan wrote at WatchMojo, and Google’s take of the nearly $10 billion in US online ad revenue for the first half of 2007 counted for 40 percent.
Here’s how he broke down Google’s and the IAB’s numbers:
If you consider that Google did $7.531B in Q1 and Q2, and all online advertising was $10B, and that Google’s global sales
– represented 48% of total revenues in the second quarter of 2007, or $1.75B
– represented 47% of total revenues in the first quarter of 2007, or $1.81B.
The math suggests that Google did $3.57B from global, and (oh-oh) $7.531-$3.57 = $3.97 Billion in the US in Q1 andQ2.
Little wonder that it has been suggested Yahoo should give Google its search business, and let Google bring in the ad revenue for Yahoo.
24/7 Wall St. cited Bernstein Research’s report, to show how Yahoo could benefit by tossing the keys to Eric Schmidt and saying, "Drive that search business, Doc.":
Bernstein offered a second analysis based on Yahoo! outsourcing its search business to Google. If this was done, search revenue would rise 28% in 2008, and total revenue by 16% over current projections. Yahoo! could cut 25% of its head count dropping operating expenses by 17%. The combined benefit of these actions would improve operating income by 205% over current Wall St. estimates.
Tripling operating income isn’t something Yahoo’s board can brush away with a Steve Jobs rah-rah appearance just because of the avenue that tripling would take. We won’t be surprised if some of the big institutional investors out there start leaning on Jerry Yang to start giving this consideration.