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Google reveals revenue per business unit: what are they up to?

October 15, 2010

How many non-traditional businesses out there can say they have three separate divisions that make $1 biilion per year each?  Well – Google can: almost.

They recently announced their q3 earnings for the year and for the first time gave some revenue splits to show where their fortune is coming from. Traditionally regarded of course as the search advertising giants, this calculated move has started Google’s slow repositioning to demonstrate that the business  is becoming more stable via diversification.

I mean, not too long ago MySpace was the place to be, until a scruffy kid from White Plains came up with a better idea (even though others later claimed it wasn’t really his idea), and Microsoft was the king of the world until a couple of mathematics geeks from Stanford came along with a good idea and (apparently) a roomy garage to work in. What’s to say the next big thing isn’t right around the corner now?

So in declaring more information about their revenue splits, Jonathon Rosenberg from their product team tells us that Google globally will make in the vicinity of US$2.5 billion from display advertising (mostly via their acquisition of Doubleclick), and that the monetization of 2 billion Youtube views every week is going well.  It must be – because that’s 50% more views – or 300 million+ every single week. Add to that the forecasted US$1 billion they’ll make from their mobile business (mobile advertising as opposed to the use of Android) and – hey presto – you now have a well balanced run-sheet for investors to pore over.

What’s to come? You could expect that mobile revenues will grow exponentially, and I wouldn’t be surprised to see mobile revenue overtaking display ad revenue at some point in the future (unless someone else comes up with that ‘better idea’ mentioned earlier). Forgive me for pointing out what some consider to be the obvious, I suppose.

What will be most interesting over the next year or two will be observing whether Google continues to acquire new businesses or if it settles and starts to focus on growing its unrealised revenue potential via the mobile and YouTube divisions. They even recently appointed Karim Temsamani, Head of Australian operations, to head up their global mobile operations.  There’s got to be a good reason they’re pointing out the highlights of those divisions, right?

Let’s wait and see.

Deliriant Isti Romani – These Romans are crazy!


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