Monday, May 16, 2011

Google’s Economic Impact: $64 Billion

Google's search and advertising tools provided $64 billion of economic activity in 2010, the company says.

Google derives that estimate by looking at business activity in each of the U.S. states and then estimating the economic value provided by Google Search and AdWords, Google AdSense and Google Grants.

To estimate the economic impact of Google Search and AdWords, Google uses two assumptions. First, that businesses make an average of $2 in revenue for every $1 they spend on AdWords. Google Chief Economist Hal Varian, developed this estimate based on observed cost-per-click activity across a large sample of Google advertisers.

The second assumption is that businesses receive an average of 5 clicks on their search results for every 1 click on their ads.

No comments:

Directv-Dish Merger Fails

Directv’’s termination of its deal to merge with EchoStar, apparently because EchoStar bondholders did not approve, means EchoStar continue...