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Google talked about search traffic growth, its contextual advertising business, local search, desktop search and traffic acquisition costs on its Q4 earnings conference call tonight. Here are some key quotes:


On traffic acquisition costs:

TAC decreased as a percentage of Google Network revenue this quarter in part because we saw exceptional revenue performance in several partners with guaranteed minimum payments, resulting in fewer nonperforming deals and an overall higher margin for our AdSense program. Also… a greater portion of the network revenue was derived from members with whom we generally have lower revenue share obligations.

On local search:

Keyhole delivers a multi terabyte database of images and mapping information that lets users fly around the world from their home computer, as well as locate a hotel, school or park. …we plan on integrating and building on it over time as the localization of search becomes more important.

On desktop search:

...we plan on updating Google Desktop Search soon with even better functionality...

On growth in searches

...we saw very favorable user traffic growth literally queries and people coming to Google...

On Google's contextual advertising business (AdSense for Content):

We obviously started in that market just very recently, and I think that we are going to be able to see really big improvements… I expect ultimately that will probably have a faster rate of growth in terms of monetization per impression on a percentage basis because it is so new and there are so many opportunities.

(Quotes from the CCBN StreetEvents transcript.)

Source: Google (GOOG) on search and contextual advertising (quotes from the conf call)