Google Profits Beat the Street: 30% of Revenue Comes From Adsense & Partner Traffic
Google said fourth-quarter profit, excluding one-time charges, was $5.10 a share, beating the average analyst forecast of $4.95 according to Reuters Estimates.
Revenues rose 18% to $5.7 billion, in the 4th quarter up from $4.83 billion in the 4th quarter of 2007.
Google owned sites generated 67 percent of revenue, or $3.81 billion, rising 22 percent from a year ago. Traffic acquisition costs, the portion of revenues shared with Google’s partners, decreased to $1.48 billion.
Google’s partner sites generated revenues, amounted to $1.69 billion, or 30% of total revenues, in the fourth quarter of 2008. This represents a 4% increase over fourth quarter 2007.
Paid clicks rose 18 percent.
On a negative front, Google announced that it wrote down $726 million of its $1 billion investment in AOL.
Google’s $1 billion, 5% stake valued AOL at $20 billion in 2005. Subtracting 72.6% suggests that Google now values AOL at $5.48 billion.
Over the last quarter of 2008, Google said it spent about $368 million on capital expenses – mostly on data centers, servers and networking equipment.
As of Dec. 31, Google said it employed 20,222 full-time workers, slightly up from the 20,123 it employed at the end of September.
It’s especially interesting to note that 30% of Google revenue comes from Adsense, and domain parking (hey that’s our industry) and all other non-Google owned traffic and that represents a 4% increase from the previous year.
This is good news, that traffic outside of Google owned sites, composes a significant amount of Google revenue and that portion continues to grow.
Shares of Google which initially rose in after hours trading, wound up down $8 to $298.
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30% of Google revenue comes from outside sources of traffic – that is really interesting fact! I did’t know that Adsense and domain parking have such a big share of Google’s revenue. That’s good news. Bad news is that it rose only 4% year over year (for revenue that came from Google’s own traffic it was 22% up from previous year).
now we see why goog wants to work directly with name owners
Even though 30% of their ad revenues comes from their AdSense partners, they only keep a small portion of it, about 12%.
Last quarter AdSense revenues declines for AdSense publishers. Total revenue increased slightly for AdSense, but Google took a bigger cut, so in Q4, less money went to publishers than in Q3.
AdSense revenues have been flat since around 2007.