Did Google Miss?

January 31, 2006

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Did Google Miss

Google's "Google Sites Revenues - Google-owned sites generated revenues of $1.098 billion, or 57% of total revenues. This represents a 24% increase over the third quarter revenues of $885 million." Why don't I put much stock in the 42% of revenues generated on partner sites? Three reasons, basically:

Google's share of this revenue is much lower than on sites owned by them.

This share could drop, and the size of the network could even drop. Disintermediation, essentially, faces any company that facilitates ad placement on sites they don't own.

In mid-term, Google's partners can always de-emphasize the Google ads to highlight better-paying ones.

The company claims to be putting an enormous investment to scaling the current business, and future businesses, globally. For now, "Google.com sites," and the advertisers who show up there, pretty much carry the can for the whole grand experiment. With $8 billion in the bank and 5,600 employees, whatever they do, it's going to get noticed. Still though, the underlying weaknesses in their non-Google.com businesses persist. Good night, and good luck.

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