Seeking Alpha
Research analyst, tech, internet
Profile| Send Message|
( followers)  

By Carl Howe

Monday's New York Times reveals a number everyone has been wondering about: How much ad revenue does Google keep for itself compared with the amount it gives to the sites running its ads? The answer: it keeps 21.5% and pays out 78.5%. No wonder they are making money hand over fist.

That said, the reach and breadth of Google's traffic (literally billions of hits a day) and brand certainly justify a network premium. But with competitors like Yahoo! and MSN launching their own ad networks, I'm sure that premium will change over time. But as Geoffrey Moore notes in his book The Gorilla Game, it's the 800-pound gorillas that reap most of the profits from a market. And while Google may not be 800 pounds yet, they certainly are gaining weight.

Source: Ad Agent Google Keeps 21.5% (GOOG, YHOO, MSFT)