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Apr 18, 2008

Google's Search and International Growth Hides Declining US Clicks

The US Long Tail of Millions of Bloggers and Publishers Lose

Google has managed search and international share growth well. However, this hides declining clicks in the US and devastation to the Long Tail of millions of US blogs. 

As reported earlier, Google's 31% search growth in the US comes from increased share and use per person. However, Google's decision to reduce the click area in November effectively decreased click rates by over 25%. Small CPC improvements reduced the pain slightly.

Google's TAC paid to affiliates, after adjusting for higher international share, has actually declined in dollars for US partners. If we assume that naive users in third-world countries click on ads more frequently, this further reduces the US share. With the huge increase of affiliates and affiliate page views in the US, the average dollars paid per content partner has dropped.

For a blogger, if your quarter to quarter traffic grew 31% to match Google, your earnings were probably flat or declining. If traffic did not grow, revenues took a double-digit drop. 

That's the macroeconomic view. It's hard to verify the Long Tail microeconomic view. What has been your experience?

Google paid click growth slowing - Advertising Shelf Space

View NEWS: Cookie Deletion Inflates User Metrics 

View NEWS: New Study Shows that Heavy Clickers Distort Display Advertising Click-Through 

View ANALYSIS: Internet Consolidation or Fragmentation?

ANALYSIS: Who Earns the Page View?

Google Sites Revenues - Google-owned sites generated revenues of $3.40 billion, or 66% of total revenues, in the first quarter of 2008.  This represents a 49% increase over first quarter 2007 revenues of $2.28 billion and a 9% increase over fourth quarter 2007 revenues of $3.12 billion. 
Google Network Revenues - Google’s partner sites generated revenues, through AdSense programs, of $1.69 billion, or 33% of total revenues, in the first quarter of 2008.  This represents a 25% increase over network revenues of $1.35 billion generated in the first quarter of 2007 and a 3% increase over fourth quarter 2007 revenues of $1.64 billion.   
International Revenues - Revenues from outside of the United States totaled $2.65 billion, representing 51% of total revenues in the first quarter of 2008, compared to 47% in the first quarter of 2007 and 48% in the fourth quarter of 2007.  

Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 20% over the first quarter of 2007 and approximately 4% over the fourth quarter of 2007.

Google Profit Rose 30%, Quelling Investor Fears


Google Inc.'s go-go era apparently isn't over.

The Internet giant topped Wall Street estimates for first-quarter revenue and profit, and it said that the weak economy hadn't hurt its business, as some investors had feared. Google's solid performance came despite slowing growth in the number of times consumers clicked on ads that appear alongside Google's Web-search results and on partner sites.

Google's shares surged more than 17% in after-hours trading after it reported first-quarter profit rose 30% from the year before, compared with 17% profit growth in the 2007 fourth quarter. Revenue rose 42% from a year earlier. Before the ...

Liveblogging Google Q1 Earnings Report—Fears Were Overblown

googleogo14.gifGoogle reported earnings for the first quarter. 


  1. adsense does not support Indonesian Language Sites, yet they made huge bucks from local advertisers which apparently display on Indonesian Language sites..

    good story

  2. Google had announced that its International revenues reached $2.65 billion, or 51% of its total, compared with 47% of the total in the same period a year earlier.

    Google's increase in International revenues were only 4%.(Or,$106 million - Yes, that's an increase of, only $106M on,$2.544 billion in Q1 - 2007)

    But Google had also told us, that:

    "Had foreign exchange rates remained constant from the first quarter of 2007 through the first quarter of 2008, our revenues in the first quarter of 2008 would have been $202 million lower."

    That's a "real terms" DECLINE (& one that is representing 51% of it's total revenues), of some $96M !!!!!




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