Google's earnings: What future for plunging AdSense business?

Google's earnings: What future for plunging AdSense business?

Summary: AdSense represents about one-third of total revenues and is important to lots of media companies.

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TOPICS: Google
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AdSense is the red line...

 

Googgle’s [$GOOG] fourth quarter 2013 financial report is due after close of markets tomorrow (January 30) and the numbers I’ll be looking at will be for its AdSense advertising network — about one-third of total revenues — which has been plunging for the past three quarters. 

AdSense revenues are generated by showing Google ads on third-party web sites. Large media companies such as New York Times are part of the AdSense network. There’s also lots of smaller publishers that rely on the nearly $13 billion that Google paid out in 2012.  If there are problems in generating AdSense revenues, it will affect many media companies, too.

I was the only one to report on the Adsense plunge three months ago: 

Analysis: What Future For Google's Troubled $12.7bn AdSense Network?

Some Silicon Valley reporters would rather follow a car that drives itself than follow the money. 

Topic: Google

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17 comments
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  • Golden quote

    "Some Silicon Valley reporters would rather follow a car that drives itself than follow the money. "
    paul2011
    • The party might be over soon.

      Everywhere around the world, people are now starting to realise what Google is all about. Google’s so called free software and services are data vacuum that suck up all your personal. Every single time you use a Google product or an online service, data are sent to Google for analysis and cross-reference with you contacts and relatives. That includes every single Android phone with their “free” Os, Google docs, Google drive, Maps…etc. Adsens, adwords are some of the ways that Google uses to monetize gathered data. I have nothing specific against advertising. The issue here is how precise Google advertising campaign can be. And I do have something against the fact that google can sell what it knows about you to whoever offers money for it.

      To clean up this mess, a new law should be passed to oblige this industry and that includes Google, Apple, Microsoft and the other to change their licencing agreement so it can be easier to understand even for an 8 year old.

      A single statement that could look like: “By using this software, your personal data (Name, coordinates, activities and all other information about you that we can suck up) will be sent to [company name] and will be used for advertisement. [Company name] will also make a profit by selling this information about you to anyone who has some cash. Your life will no longer be secret to [company name] and its loaded friend. Agree YES / NO”

      My biggest problem about Google is: Will it still be a free world company in 20 years from now. Will it still be a “do no evil” company? What will happen with all these personal information in the hand of a private company?

      Computers used to be useful for the users. Since Lycos invented advertisement based on queries made on its site, things have change profoundly. The Internet is now the most accurate way to advertise profile and gather personal informations. Overall, I think I prefer paying a few buck for my software and services and be a bit more secure on that mater.
      gbouchard99@...
      • Does some evil!

        People have suffered some have died because of the crass way google has "updated" services and spread private details without giving customers a chance to secure them.

        In protest I deleted G+and no longer use google search or youtube with a profile.
        dumb blonde
        • youre funny

          you care about anonymous ad system gives us gmail, translate, maps, Android for free

          but you do not care about the NSA USA Nazi tactics where you CAN NOT
          Jiří Pavelec
          • CAN NOT opt out

            CAN NOT opt out
            Jiří Pavelec
      • you just lie

        Without google there are almost no innovations: gmail, translate, maps, Android for FREE!

        the anonymous ad system is more like recommendations for me, therefore useful too (I'm worried about the NSA fascists more)

        without google there would still are limited Windows and limites iPhones

        mostly Android has started the huge mass smartphone adoption therefore innovations
        Jiří Pavelec
  • I have to say, this actually could be a bad thing

    My friends will all invariably tell you that I trust Google about as much as Loverock Davidson does...but this could end up being a bigger problem.

    Plenty of websites use AdSense to monetize. For all Google's warts, they have generally kept the formula of simple, text-based ads the same. This is a good thing - no significant bandwidth hit, no annoying Flash/Javascript based ads, and no malware. This has been a generally positive thing for the internet. Take a look at the sites that don't use AdSense, and then look at their ads - they're sketchy, they're irrelevant, they're annoying, they're bandwidth intensive, they're misleading, and they're likely a rollover away from attempting to hijack your start page.

    I'd like to see another company do a better job at online advertising networks. It's not like Google's simplistic, minimalist ad scheme is some secret formula that can't be easily replicated. So far though, no one seems to have done so. This is fine, but if AdSense isn't keeping sites advertising with them, and the alternatives are handing out sketchy ads instead, then this development does not bode well for the greater internet.

    Joey
    voyager529
    • I agree with you, but ...

      ... if Google "fails" in this regard, it will merely open the door (wider) for others to step in and offer similar services ... perhaps at lower prices.

      The bigger question in my mind, though, is this: Why is AdSense slipping? It's not as if Google has a lot of manual overhead involved -- the system is largely self-service. Is it that advertisers are no longer buying ads from Google because of a price increase? or because the ads aren't effective? The former is an easy fix. The latter, not so much ... and would seemingly haunt any would-be replacement, as well.
      imalugnut
  • Adsense

    That was probably caused by Matt Cutts, and his zoo animal updates: Panda and Penguin. I know lots of small webmaster business owners who closed down after that man updated his search engine. Also Google's results are bad right now, same sites over and over again, or pages with nothing on them.
    frogbot
  • Google got distracted...

    ...they lost sight of their core business chasing Apple and may lose their position of dominance because of it. Android was to be their saving grace, but Samsung may veer away from it and Amazon has forked it... Android is a jumbled, fragmented mess. It is a good thing it is free or it might be dead already. Too bad because there are some really good ideas in Android, but it would require a real software company to run with it if they want to truly compete with Apple for mindshare.
    gomigomijunk
  • Web advertising is not going away

    If sites have viewers, they will have ad chicks, with Google being there or not, it's mostly relevant for Google, because if Google fails there, others will come.
    AleMartin
  • Google Adsense -- slow to move on mobile devices

    Google adsense - I display adverts on my websites but god damn!! these guys have been REALLY really slow to adapt to mobile devices. Let me make that as an understatement how slow they are. On the smaller devices for example eg. 4.5" handheld of mine the adverts dont even appear, the adverts aren't mobile adaptive and recent statistics show up to 40% of the traffic in Asia is navigating using a handheld device. So what the hell, my ads not appearing and the large chunk of traffic going to different screen sizes and at the moment mobile adaptive ads on the google adsense area is in "beta".

    Google might change things if they get their finger out and start working on mobile adaptive ads that actually show on devices (yes, some devices like ipad they show but on my small android phone its just BLANK)...
    zorzan
  • Google's name is spelt wrong in story.

    That can't help. ;)
    johnd126
  • The biger question is...

    What are ad revenues like overall right now. Advertising is tied directly to the economy and is in many ways a reflection of the economy.
    WhoRUKiddin
  • Effectiveness

    Here's a question for you all: Have you EVER bought something because of a web advertisement?

    Beyond the annoyingness of web ads plastered everywhere and vying for your attention is the fact that I don't believe they actually DO anything but annoy users.

    I personally believe that web ads are a con allowing some parties to monetize the web, but they really don't do anything but annoy users and slow down your browsing.
    varase
  • Google Ad Revenue...

    I have been in media for almos 50 years, and an online publisher for almost years , which gives me the cred to tell it like it is.

    At Google the right hand doesn't seem to know or care what the left hand is doing...

    As a pioneer AdSense publisher (over 10 years) I have said on many occasions that Google AdSense saved our lives by allowing us to generate revenue based on audience and not opinion...and for over 8 years it worked fine, Google made money The Auto Channel made money and the advertisers got great bang for their buck with click through rates (from real viewers) over 2%. and then along came Panda I Panda II III and then Penguin I II and who knows how many more...all implemented in the name of a more perfect search experience.

    But these "search improvements" have resulted in our audience reduction of 65% and a Google share revenue reduction of almost 70%... and this from a small editorial based site with a historic 1-2 million uniques monthly...

    Multiply this by the totality of the adsense publishers and you can easily see why the reduction in revenue...

    Time to get some grownups to make decisions, it better happen fast before independent publishers go the way of the Gooney Bird.
    bgordon100
  • it is because

    people have been opting out, and wiping Google cookies out or just plane not pay attention to the adds.
    delgen