Google's Q1 Earning jumped 37%, revenue rose 23%



Google Announces First Quarter 2010 Financial Results - Investor Relations - Google

Revenues – Google reported revenues of $6.77 billion in the first quarter of 2010, representing a 23% increase over first quarter 2009 revenues of $5.51 billion. Google reports its revenues, consistent with GAAP, on a gross basis without deducting TAC.

Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 15% over the first quarter of 2009 and increased approximately 5% over the fourth quarter of 2009.



Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 7% over the first quarter of 2009 and decreased approximately 4% over the fourth quarter of 2009.


TAC - Traffic Acquisition Costs, the portion of revenues shared with Google’s partners, increased to $1.71 billion in the first quarter of 2010, compared to TAC of $1.44 billion in the first quarter of 2009. TAC as a percentage of advertising revenues was 26% in the first quarter of 2010, compared to 27% in the first quarter of 2009.
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And as someone added on another forum, they only need to drop the click fraud filters for a day or 2 to boost income when needed.
 
The fact that they dropped a lot of large adwords accounts last year due to rebills raises my suspicions that the rise in average cost per click was no accident or market fluctuation either.

Oh yeah and the average payout per click on Adsense last year was complete shit. I'll testify that all my average CPC's dropped by a generous 50% from the year before. I've even had some sites that have averaged $0.50/click consistently for well over 5 years suddenly dropped down to around $0.04/click magically when the end of that first quarter came around. There they've stuck ever since. I used to never get penny clicks now it's roughly 40% of my Adsense revenue. Now its looking even worse for the start of this year.

Google's business model
Slowly charge more per click + Slowly payout less per click + Give more focus on local business who don't know better to fill in the gaps by lost adwords customers + Give special privileges to large advertisers such as Ebay to drive up low paying keywords = Profit

I'm predicting the more their profits increase each quarter the harder it will be for us to make money with them. Not that its much a prediction, welcome to last year.
 
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I just wrote a paper about exactly that strategy for an Industrial Organization class, Eli. :-D

Economic theory suggests that it will slowly fail as information becomes more "clear." I posit that the whole quality score system and the whole "black box" AdSense system exists simply to increase profits obfuscating the formula/decision making process.
 
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Sorry if this is a hurr-durr question, but...

Why would cpc's go up with less overall advertisers?
 
Refrozen said:
I just wrote a paper about exactly that strategy for an Industrial Organization class, Eli. :-D

Economic theory suggests that it will slowly fail as information becomes more "clear." I posit that the whole quality score system and the whole "black box" AdSense system exists simply to increase profits obfuscating the formula/decision making process.
Click to expand...

Post that shit here, sounds like a good read
 
At what point are Adsense publishers going to dump it? For guys like Eli, not for a long while considering how little effort is required. But what about the rest of them?

It's always bugged me that they have completely obfuscated how they divvy up the profits in Adsense.
 
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