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Google Boasts Of $64 Billion In Economic Impact

In conjunction with National Small Business Week, Google is trying to burnish its image by touting the economic impact that its programs, including AdWords and AdSense, have had on the U.S. economy. According to the company, Google provided $64 billion in economic activity for American businesses and non-profits in 2010, 18% greater than the 2009 number.

The company says nearly 1 million U.S. businesses and non-profits earned income from Google tools in 2010. For every $1 a business spends on Google AdWords, the company claims, they receive an average of $8 in profit through business generated via both Google Search and AdWords. The numbers are based on a complex formula developed by Google’s chief economist Hal Varian. It starts with the assumption that every business gets $2 in business for every $1 spent on AdWords — an assumption based on data across a large pool of advertisers. Then it assumes that, for every ad click, advertisers get 5 clicks on their organic search results. More methodology from Google here.

The state that benefited most from activity generated — $15 billion — was Google’s home state of California, the company said. Next up are mostly the usual suspects when it comes to population size and digital orientation: New York ($8.6 billion), Illinois ($4.2 billion), Washington ($3.7 billion) Texas and Florida ($3.6 billion each), Massachusetts ($2.8 billion), New Jersey ($1.9 billion), Georgia and Arizona ($1.4 billion each), Pennsylvania ($1.6 billion), Michigan and Virginia ($1.3 billion each), and Minnesota ($1 billion).

View Google’s Economic Impact Map – 2009 in a larger map

The numbers come at a time when Google is under fire for everything from allegedly illegally selling advertisements to rogue pharmacies, to potentially violating consumers’ privacy with their mobile phones. Needless to say, the company is eager to remind people of the good that the company is doing economically, and of its support of small businesses.

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