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How Big Is Google? Here’s Another Measure

Started by Kalyan, Apr 19, 2008, 10:13 AM

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How Big Is Google? Here's Another Measure

Rory Cellan-Jones, a blogger for the BBC, calculates an interesting statistic from Google's earnings release yesterday.

Google earned $803 million, about £407 million, in the United Kingdom in the first quarter. If you assume that rate won't grow, that makes £1.6 billion for the year. And since Google's British earnings are up 40 percent from a year ago, it is a safe bet it will grow.

That means Google will overtake the ITV television network as the biggest seller of advertising in Britain this year, Mr. Cellan-Jones figures. ITV sold about £1.5 billion of advertising last year.

Britain's biggest commercial television business — the original "license to print money" — is about to be overtaken by an American upstart which only arrived in the UK in 2001.

That should be no surprise. As best as I can tell, Google sells more advertising than any company in the world. This year Morgan Stanley estimates Google's total advertising revenue will be $21.9 billion. Excluding the payments it makes to companies that display its ads, Google's total ad revenue will be $15.7 billion.

Time Warner, the largest media company in the world, earned $8.8 billion in advertising revenue last year. Viacom had $4.7 billion in ad revenue last year. I'm still working through the numbers at the other big conglomerates, but it seems clear that none of them sold more than $16 billion in advertising.

Google, as it made clear yesterday, is hardly slowing down. It stated a goal of becoming the largest seller of Internet display ads in the world (overtaking Yahoo). More significantly, it is devoting enormous effort to building a system for television ads that will rival its text ad system. For now, it is focusing on its YouTube unit. But it plans to extend these to other forms of video, delivered both over the Internet and by digital cable and satellite systems.

If Google succeeds — and that is hardly guaranteed — it could easily double in size or more, and thus dwarf any player in advertising.

We don't know what effect this will have. Google will argue that it is making the world of marketing more efficient and thus better for everyone. Many in the media business are not so sure that this efficiency helps them.

But it is a good bet that the licenses to print money that have been relied on by companies like ITV around the world are increasingly being transferred to Mountain View.