Will Google AdSense Revenue Decrease in 2011?
Sunday, February 27, 2011
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In the 4th Quarter of 2010, 30% of Google’s revenue ($2.5 Billion) came from “Network Revenue” or Google AdSense, according to Google’s 4th Quarter Revenue Press Release. Google AdSense is an ad serving platform, where website owners can enable text, image, and video advertisements powered by Google. Website owners are paid out a commission either on a per-click basis or on a per-impression basis for those advertisements. Google provides an incentive for website owners to publish quality content and share in the commissions earned from either ad impressions or ad clicks. The result of such content creation incentive has given rise to businesses such as Demand Media, a portfolio of websites including eHow.com and LiveStrong.com. Both websites produce thousands of web pages every day to be indexed on search engines with Google AdSense enabled on each page.
Mass-producing content has been lucrative for companies like Demand Media, who recently had an initial public offering valuing the company at $1 Billion. It sure seemed like Google was happy with all of the new content created on a daily basis, because Google can profit from advertisements served on those new web pages. Well, respected Search Engine Optimization companies have noticed that the quality of content produced by certain websites has decreased significantly even as early as 2008. These websites mass producing content do research on long tail keyword phrases, pick many keyword variations and produce tons of low quality content to be indexed in search engines.
It took Google years to act on this information. Nonetheless, Google recently announced another update to their search engine algorithm for United States searchers which effectively bans “content farms,” websites that mass produce low-quality content. Danny Sullivan of Search Engine Land reported on the latest search engine algorithm update and labeled it the “farmer update.” Danny also provides a list of websites that had the biggest drop in terms of online visibility and keyword rankings in the days after the farmer update launched in the US. Some of the websites or “content farms” that got hit the hardest from the algorithm are: ezinearticles.com, hubpages.com, associatedcontent.com, mahalo.com, amongst others.
With the farmer update launched in the US, I wonder how this will affect Google’s AdSense Revenue in 2011. These content farms produce thousands of new web pages every day, in some cases tens-of-thousands of web pages every day to be indexed in search engines with AdSense enabled on each page. Yes, there are Trillions of web pages indexed on Google, but will Google’s AdSense Revenue take a dive in 2011? I am certainly NOT worried about the health of Google’s overall business. How will Google pivot to produce the same AdSense Revenue in 2011? Maybe they don’t have to pivot or think about AdSense Revenue moving forward.
Do You Think Google AdSense Revenue will be impacted in 2011 with the Farmer Update?
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eBay seems to be a big winner in the farmer update. They moved up for numeraous categories. If these new results remain in place, Google will have imposed a new tax on small merchants, as they will have to consider opening up an eBay store if they want to be found.
Interesting. Thanks for the comment, Randy!
eBay seems to be a big winner in the farmer update. They moved up for numeraous categories. If these new results remain in place, Google will have imposed a new tax on small merchants, as they will have to consider opening up an eBay store if they want to be found.
Interesting. Thanks for the comment, Randy!
Really? I did not notice this, where did you get this information? (Not that I don’t believe you, I’m just curious)
Five months ago, after the initial Panda update, I reviewed the rankings for about a dozen commercial products that either I or my clients sell. I noticed that eBay and Amazon had moved into top 5 postions for over half the terms I reviewed. Thus, my observation has to be classified as anecdotal rather than quantifiable. However, I stand behind my conclusion. In the subsequent five months, eBay and Amazon have fallen off a bit in the rankings. While I can’t provide quantitative support for this observation either, I review these terms frequently, and despite the dubious methodology am reasonably confident that my observations are corect.