Google collects a 32% sales commission on ads it sells for non-Google websites

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Today, “in the spirit of greater transparency with AdSense publishers,” Google posted a message on its AdSense Blog that 68% of the revenue that Google collects for ads appearing on AdSense partners websites (i.e., websites that are not owned by Google) is “shared”‘ with the publisher.*

In the past, Google has never reported such a “publisher share” of revenues. However, in this January 16, 2006 article in the New York Times, such a figure was used without citation of a source:

“Google.com and the company’s foreign search sites contribute more to Google’s bottom line than AdSense, because for every dollar the company brings in through AdSense and other places that distribute its ads, it pays roughly 78.5 cents back to sites…that display the ads.

Again, there was no citation for the 2006 78.5¢ figure that the Times characterized as “a shadow payroll.” I, however, did characterize it (as I have since about 2003) in this post on that same day as not being a “share” or “shadow payment” or, as Steve Baker called it, “a payback”, but described it as a classic advertising sales agency commission model — one in which Google was collecting a 21.5% commission.

While I continue to characterize that portion of the revenue Google retains as a “commission,” Google never will label it such, as doing so would dramatically lower their top-line revenue number. In their quarterly and annual reporting, they treat the total amount paid by the advertiser as gross revenues and label the publisher portion as “Traffic Acquisition Costs” or “TAC.” As I have said regularly for years, calling it “traffic acquisition costs” is akin to your realtor describing the 94% of the sale price you pocket on the sell of your house as their “buyer acquisition costs.”

I feel, without a doubt, Google’s lawyers and accountants are spectacularly savvy and I’m sure there are very sound reasons they can accurately call the publisher portion of gross revenues as something Google “shares” rather than describing the portion they extract “a commission.” And, to be clear to any and all such savvy lawyers and accountants, I’m in no way remotely suggesting Google is doing anything that is mis-applying names of century old business practices. I’m merely suggesting that water fowls who quack and waddle are called ducks.

Also, for the record, (despite the New York Times’ 2006 ten-percentage points higher figure of 78.5% going to publishers vs. the transparently reported 68% that actually flows the publishers’ way) I think the one-third commission rate is fair as it includes all of the marketing and sales-support costs typically incurred by the publisher.

*The post also revealed the “publishers’ share” on “Adsense for Search” that originate on a publisher site is 51%. The 51% “search” share is, in my opinion, not a commission as the revenue is being generated on incremental advertising inventory created by content provided by Google.

This is a rather large cloud announcement

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While they’re not saying what the total amount of file space they’ll provide each user, Google has just announced that they’re rolling out the ability to store any file of 250MB or less on Google Docs. On the Google Blog, they say it this way:

“Over the next few weeks, we’re rolling out the ability to upload all file types to the cloud through Google Docs,”

This is a rather large thing they are announcing if you consider “the cloud” is that mythical place where we all one day will be storing all of our digital data. Who becomes our primary portal to the cloud (“stairway to heaven”) is going to be our lynchpin to lots of stuff we do.

Hardcore geeks already have several such connections to the cloud. For example, a business like Hammock has its own and hosted servers for doing all sorts of back up and file transfer and web hosting activities. We also use everything from Amazon web services to RackSpace to DropBox to MobileMe for different cloud activities.

However, with Google entering the arena of file hosting for consumers (and small businesses), it places them in a space with Apple and its MobileMe service (not one of its easiest products to explain).

What this likely points to is a future where your Android powered slate computer is fully synching with your Google docs account — music, movies, the whole ball of data.

Frankly, it’s all sorta there already.

It just needs to get easier to understand for real people and not just geeks.

P.S. This also points to the knowledge by Google that Apple’s iSlate will have all sorts of cloud-synching abilities wired into the product.

Bottom line: Hang around to see if two’s a crowd on my cloud.

Update: On yet another Google Blog, The Google Docs Blog, they do go into the pricing:

“You’ll have 1 GB of free storage for files you don’t convert into one of the Google Docs formats (i.e. Google documents, spreadsheets, and presentations), and if you need more space, you can buy additional storage for $0.25 per GB per year.”

Is that a spread sheet in your pocket? Presentation tips when using docs.google.com/m

Via the Google Docs Blog, news of the new mobile (“m”) version at docs.google.com/m. Currently, you can only view — not edit — documents (the post indicates that’s a feature on its way). I’ll be trying out the “presentation” feature later and will add a video to this post of what that looks like. If it works and there were an output-to-display “jack”/function/device (whatever?) on an iPhone, (update: see comments) I think this could one day be a road-warriors dream. In the meantime, the above shot is what a spreadsheet looks like. It’s a vocabulary list the 17-year-old and I made for SAT prep.

Later: I experimented with Google Docs presentation on my iPhone and discovered a couple of things. At least in my quick experiment, an imported Power Point presentation into Google docs was extremely slow in the mobile version. Discovering that, I tried creating a quick (as in five minutes) presentation natively in Google docs and the presentation zooms. Here’s a two-minute video of my test, using my quick presentation called: “”Six tips for a presenation you want to share via docs. google.com/m”

Not that you’d ever want to, but you can see the Google Docs version of presentation here if you don’t use Safari. You don’t have to log into Google Docs, but you’ll get a screen making you think you do.

Here are the “Six tips for a presenation you want to share via docs. google.com/m” — saving you from having to watch the video or presentation:

1. Think of a better way — like maybe talking instead of presenting.

2. Don’t use background color or fancy text or graphics or graphs. (It’s tiny and you’re doing this over the Internet so don’t add stuff that will slow it down).

3. Use really big type. (On a tiny screen, even 68 point type will be tiny.)

4. Don’t use bullet points (don’t ever use bullet points. Or numbered tips for that matter).

5. Think vertical and top-heavy. (The control pointer covers up the bottom of the screen so your presentation will look better when displayed vertically. All you need to do is leave plenty of room at the bottom of each slide.)

6. Don’t try to be funny. (Don’t ever try to be funny in a presentation unless you’re a trained professional…and then don’t.)