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Bartz: "Google Is 90% Search, That's A Fact" – Except It's Not

Mike Arrington just had a no-holds barred interview with Yahoo CEO Carol Bartz at TechCrunch Disrupt. Bartz gave back as good as she got, at least in sound bites. As usual, I didn’t find many of her statements convincing. A highlight was her saying “Google is 90% search. That’s a fact.” It’s not.

In particular, Bartz was referring to advertising revenue. And she’s wrong. Let’s go to Google’s 2009 financials. Revenue is like this:

  • Overall Revenue: 23.6 billion
  • Ad Revenue: 22.9 billion – 97%
  • Other Revenue: 0.7 billion – 3%

Ads were responsible for 97% of all Google’s revenue, even higher than the 90% figure that Bartz put out!

Nope.

It’s true that ads generated 97% of all of Google’s revenue, but Bartz said “search” was 90% of Google’s revenue. What percentage of revenues came from search, according to Google?

I don’t know. Neither does Carol Bartz. Google doesn’t disclose this.

Some of Google’s revenue came from search ads. Ads where, when someone entered a keyword, they got an ad.

Some of Google’s revenue came from contextual ads, that are show on web pages that people view.

There’s another name for contextual ads. They’re called display ads.

See, some contextual ads are text-based, where the ad copy within them is shown based on the editorial copy of the page they are on. Some are image ads. Some are video ads.

Display ads are often considered the same as image or “rich media” ads but really, they are any ad that are displayed to readers of a web page.

Talking about display ads is important, because Yahoo is a leader in display and would have you think Google is nowhere to be found in the space.

Indeed, when you look at recent comScore figures, Yahoo has the second highest share of display ads shown to Americans — 12.1% — second only to Facebook at 16.2%. And Google? Way down the list at 2.4%.

The problem is that comScore doesn’t seem to count text-based contextual ads as display. Despite these ads taking up display-space. And perhaps it might not even count some contextual ads that are image or video-based.

Bottom line? It’s not a fact that Google gets 90% of its revenue from search, unless Bartz cares to name her source within Google providing that figure.

It is a fact Google gets the majority of its from advertising, which various competitors have used over the years to argue that Google’s a “one trick pony.” Of course, that’s like arguing a television network is a one trick pony for making most of the money off the ads it places against TV shows.

That’s its main product. Running around trying to “diversify” to be a two trick pony potentially puts you in the spot Yahoo found itself in, having so many ponies in the race that it’s hard to know which, if any, are going to win.

Ad revenues also overlook the fact that Google’s not a one trick pony when it comes to products. Yes, it offers search. And a web portal. And email. And online web applications. And online video viewing. And maps. And many other products. And “billboard” in the forms of ads it places across the web on pages and in other people’s products.

Is it a problem that all those diverse products primarily pay their way through advertising? Sure. I mean, what happens if we have a major downturn in ad spending.

Oh, yeah, we just did. Google came through that just fine.


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