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8/04/2005
  Ads on blogs not that important to Google

AdSense on blogs is not that important to Google from a revenue perspective. And Yahoo launching a competitor won't really affect them revenue-wise either.

In many articles reporting on Yahoo's YPN launch, you read that Google will no longer have a monopoly in AdSense. You then read how AdSense is 49% of Google's revenue. Uh-oh. Right?

This analysis is very superficial. AdSense has two components:

However, when people think of AdSense (and now YPN), they think: ads on blogs, or ads for small publishers. That's just a small part of AdSense for Content.

It's very likely that over 85% of AdSense revenue comes from negotiated contracts for search results and contextual ads with large publishers like AOL and the New York Times. So if Google made around $500M in AdSense revenue last quarter, at least $430M comes from big publishers. Profit-wise, this revenue is not nearly as profitable as the stuff coming from Google's own network of sites.

Small publishers are just not that important from a financial perspective. Therefore, YPN isn't really a major threat on the revenue front.

 


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