Google Leads the Way to Higher Display Earnings

Linc Wonham
by Linc Wonham 15 Oct, 2010

Google recently predicted that online display advertising would become a $50 billion industry by 2015, and the company's third-quarter earnings report seems to support that claim. While search remains Google's largest revenue producer, the company expects to earn $2.5 billion from display advertising this year.


The report, which stated Google's overall third-quarter earnings to be $7.29 billion, also supports the data released earlier in the week by the Interactive Advertising Bureau (IAB). The IAB reported that display advertising earnings have increased 16 percent over the past year, and that overall online ad sales for the first half of 2010 were up 11.3 percent from last year.


Other areas identified by the IAB as experiencing significant growth are online video advertising and mobile advertising, which, like display, is among Google's biggest initiatives outside the realm of search. Google's earnings report indicated that its 2010 mobile ad revenues will reach $1 billion.


Overall, Google's earnings were up 23 percent from the third quarter of 2009.


Specifically in search, the September launch of Google Instant has had a moderate effect thus far. The latest data from comScore showed that Google's search share increased .7 percent in September to 66.1 percent of the overall market.


Google's senior vice president of product management Jonathan Rosenberg, speaking at the release of the earnings report, said that the development of Instant was motivated more by user demand than by financial aspirations.


"We didn't launch Instant to make more money," he said. "From a revenue standpoint its impact has been minimal, and from a resource standpoint it's actually quite expensive. Instant wasn't introduced based on a narrow financial calculation."