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.

Related Topics: Channel: Industry | Features: Analysis | Google: Business Issues | Top News | Yahoo: Business Issues

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About The Author: is a Founding Editor of Search Engine Land. He’s a widely cited authority on search engines and search marketing issues who has covered the space since 1996. Danny also serves as Chief Content Officer for Third Door Media, which publishes Search Engine Land and produces the SMX: Search Marketing Expo conference series. He has a personal blog called Daggle (and keeps his disclosures page there). He can be found on Facebook, Google + and microblogs on Twitter as @dannysullivan.

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  • Andrew Goodman

    Google doesn’t break out “revenues from search,” in so many words. But we can definitely guess intelligently from the breakouts provided in quarterly and annual statements.

    Over 60% of revenues come from “Google properties,” but of course YouTube and others increasingly factor into this. That would indicate that “search” makes up somewhere slightly under 50%, but then, if you count the partner search deals (which get filed under partner revenues), that would increase the share from “search” (on other websites).

    About half of Google’s revenues appear to be from search, and certainly the Google Search revenues are the most profitable for the company (YouTube’s costly to run, 68% of revenues on content go to publishers, 51% of revenues on partner search go to partners).

    97%+ of GOOG’s revenues are from ads;
    50%+ are from search;
    and they have dozens of viable product lines.

    Any way you slice it, Bartz’s “fact” is more like a general comment; certainly not factual.

  • http://www.thesearchagents.com Bradd Libby

    Interesting interview, but I can’t find that quote anywhere in the link you provided.

    Perhaps it would help if you could provide an extended quote, with Arrington’s question in it. The snippet: “Google is 90% search. That’s a fact.” is not very helpful by itself.

    Maybe she was implying that Google’s revenue is 90% from search, but she didn’t say ‘revenue’. So, maybe she was saying that, in people’s minds, when asked what Google does, 90% respond ”search” or “search engine” or equivalent.

    The figures you provide about Google’s revenue are very interesting, but I’m willing to give Bartz the benefit of the doubt until I can see her quote in context.

  • btabke

    Sure she might be taking liberties with what she defines as search. Such as:

    > @ag: Youtube.

    You could classify almost 100% of Youtube ads as “search”.

    Where does AdWords stop and AdSense start? I think there is a gray area that you could define as search. AdSense doesn’t work without being powered by search.

    So lets flip it around, if Google lost the search engine, wouldn’t they also lose 90% of their revenue? I think they would.

    If yahoo lost thier search engine, would they lose 90% of their revenue – it would be a small blip on their bottom line.

    What’s with all the apologizing for and carrying water Google for around here lately? So what that she dropped a throw away sound bite!? We could play parse-the-ceo with every major company. Atleast she has the nads to be out in public. The Google founders are holed up in the GooglePlex like hibernating bears. Who knows if they even still work there? When was the last time they were within microphone shot of an independent reporter?

    > 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.

    No no no. It is like arguing that Time Warner gets 90% of it’s income from CNN when they own 40 other networks.

    > http://www.google.com/intl/en/options/

    Seems to be plenty of channels to make money from at Google and they are generating 97% from one channel? Ya, I’d call that a one trick pony.

  • Tim F.

    I don’t see the value in trying to defend against or take away the “one trick pony” moniker. No, it is not the same as calling a business that focuses on its core business a “one trick pony.” The fact is Google is extremely diversified — maybe more so than Microsoft — approaching fields like energy, devices, operating systems, television, etc… You get called a “one trick pony” when you try to learn new tricks but only execute one well. This is Google. The defense against this label that you (and Michael Arrington in this interview) espouse is patently false and not analogous. Google spreading its tenticles into the far reaches of new markets and not generating a new source of revenue is not the same as a company that focuses on a core business.

    One can argue that the diversification is only intended to serve the core market, but that’s neither the argument you are making nor does it allows pan out for Google.

  • Andrew Goodman

    Hey btabke,

    Speaking for myself only, I was not carrying any water for any hibernating bears. Just trying to run through some numbers.

    Parse-the-CEO may be an unfair game. On the other hand, Arrington’s lead question, “What is Yahoo,” sure makes you think, doesn’t it?

    And if a lot of the answer has to do with ad revenue, you then ask “ad revenue against what?”

    And it’s always attached to some service that Yahoo no longer runs, but rather outsources.

    Which brings us back to the puzzling question – “What is Yahoo?”

    I’m sure they’ll be asking the same question of Facebook in five years, as they formerly asked it to AOL. In our space I guess it’s the type of question you ask of an overly diversified company, light on technical innovation with few barriers to entry, that was formerly very successful.

    At least with Google, AOL, and Facebook (all huge *brands*) you could sort of associate them with one *thing* — “Google is the huge brand… of search”; “AOL is the huge brand… and it’s my ISP”… “Facebook is the global powerhouse brand… of my social network / social media app”.

    Yahoo is a big brand of… “we do a lot of everything”.

    Hmm come to think of it, Bartz is right about Google, in that sense. Google both does a lot of everything, and has top of mind positioning in one thing. Yahoo is sort of the opposite of that. Peanut Butter Man was right.

  • http://my.opera.com/rafaelluik Rafael

    Author, I can’t agree on your point, maybe she was referring to search but meant all the things included on search (ads shown in searches, adwords, etc.)

  • http://searchengineland.com/ Danny Sullivan

    Andrew, the problem with “Google properties” is that they include both search-related ads as well as contextually delivered ones. Maybe search is 90% of that 60% from Google properties, so puts it under 50% mark you’re suggesting. Maybe search is much less. Maybe it’s more. We just don’t know. All those ads that play these days in YouTube videos certainly aren’t search.

    Bradd, the interview I linked to is TechCrunch’s live blogging of her interview. Below, you can watch the entire interview. They didn’t catch her quote that this story is about. I did, as I watched her interview live. You can hear it at 30:37 into the interview. Actually, watching it again, she says “They are 90% search. That’s a fact” rather than “Google is 90% search. That’s a fact,” as I quoted. Same meaning, of course, but I didn’t catch her words exactly as I jotted down what she said. She was talking about revenue specifically, not about what’s in people’s minds.

    Brett, I disagree. I have no idea what the split is of YouTube ads, but you absolutely cannot classify almost 100% of them as search. At YouTube, I can do a search and get AdWords-like ads along the side of my video results. Those are search ads. I issued a search request, I got ads. If I’m just watching Justin Bieber singing, as I often do? Or Carol Bartz telling Mike Arrington to f off? There’s nothing search-like about those pop-up ads that appear, any more that TV ads are search-like.

    As for Yahoo’s revenues, I think search is around 25% of their revenue. Far from a blip on the bottom line, Bartz called it “critical” to her business last year:

    http://searchengineland.com/yahoo-q1-revenues-down-bartz-says-search-critical-to-yahoos-business-17929

    In terms of apologizing for Google, I don’t know if you mean around here to be Search Engine Land or in general. If it’s the former, there’s no apologizing here. If Google says something stupid, I’ll call them out on it — and do.

    Heck, I mean last week, we had a headline piece on Sergey Brin saying “We screwed up” on data collection:

    http://searchengineland.com/sergey-brin-we-screwed-up-42386

    Throw away sound bite? That was Sergey, by the way, out in public at a press conference, full of independent reporters, including myself. Yes, they do get out, just like Bartz does.

    Also last week, I highlighted the absurdity that Google still wasn’t giving people the share of AdSense payments it kept for itself, something I’ve ripped on them about for ages:

    http://searchengineland.com/google-finally-to-disclose-adsense-split-42221

    This week, they’ve finally decided to share that:

    http://searchengineland.com/google-adsense-revenue-share-42746

    So yeah, I feel like I hold them to the fire when they deserve it. But what also often happens is that because they are so big, sometimes there are claims that deserve some balance. I hope I do that fairly. You might not agree.

    I also have stood up for Yahoo in the same way, such as here:

    http://searchengineland.com/yahoo-the-failure-myth-versus-reality-14242

    As for Bartz, she’s continually trying to position her company as not Google, not search …. oh but we are search, or we’re something else, or we’re going to be competitive even if we don’t own the search engine. She’s charming, nice but quite frankly comes across confused about her own business and what it does. Such as:

    http://searchengineland.com/revisionist-history-bartz-claims-yahoo-was-never-a-search-company-23725

    http://searchengineland.com/whats-yahoos-plan-b-for-search-25669

    She’s been running the place for more than a year. The stock hasn’t really seemed to change. The $8 billion that Microsoft offered for Yahoo search before the DOJ stepped in and took Google out of the competition has gone pfft — and she still has to give up search to Microsoft, just to get them off her back.

    We’ve had a giant ad campaign that did nothing, that Yahoo itself has suggested needs more work — millions spent on that. Bartz hasn’t really had a great year. So when she start talking about what a chief competitor needs to do — which has had a great year — she puts herself out for special attention.

    Hey, give it another year, and maybe I’ll be amazed at what a genius she turned out to be. But right now, I’m just not seeing it.

    And back to Andrew — exactly. She can’t define what Yahoo’s supposed to be clearly, and she hasn’t been able to do this for over a year now. Jerry Yang got slaughtered, laughed at, mocked (and ultimately lost his job) when he couldn’t do it. But when Bartz last year defined Yahoo as:

    “We’re the place where people find relevant contextual information about things they care about.”

    http://searchengineland.com/bartz-continues-torpedoing-yahoo-search-20705

    She got a warm reception despite that saying nothing. What the hell did that mean?

    To me, it’s worth playing parse the CEO when the CEO does something important worth parsing. In this case, Bartz is trying to maintain a fiction that Google is somehow all about search, which is crucial to her argument that Yahoo isn’t search — that Yahoo is a portal that Google can’t match.

    If you’re a web site owner, you want to know this. Because if you believe Bartz, take her at her word, then you understand that Yahoo isn’t likely to be sending you traffic (since it’s not search), so you shouldn’t bother with whatever they pitch your way. Which is a lot easier anyway, since it’s all Bing taking over.

    Or, if you don’t think she has things right, that’s good to know also. She maintains that Yahoo will keep its current search share. She argues that Yahoo’s portal features will be part of this, since Google’s all search (and in the past, she’s talked about this from a product perspective, not just a revenue one). But Google’s not all search. Google competes with Yahoo in many ways on the portal front. If you understand this, then you might realize that Yahoo could go into decline and Google gain from that — which is a whole bag of other worries.

    Personally,I hope Bing picks up some of that Yahoo share that I expect to be lost. That’s what we’ve seen since Bartz has been at the helm:

    http://searchengineland.com/when-losers-are-winners-how-google-can-lose-search-share-still-stomp-yahoo-41779

    We need a counterbalance to Google. It’s not going to be Yahoo, not in my read of how things are.

  • http://www.thesearchagents.com Bradd Libby

    “Below, you can watch the entire interview.”

    I’m sorry, I don’t know which link you are referring to. You give 9 links, all of them to Search Engine Land, and none of which seems to have a video of the interview. Forgive my ADD, or whatever it is – I’m not trying to be a pain, I’d just like to hear the quote in context. (You quote Bartz as saying: “They are 90% search.” How do we know she did not say: “”They are 90% Search.”? ‘search’ is a verb, but ‘Search’ is the name of a specific Google product. Again, I’d just like to hear the quote in context.)

    You suggest that Google’s is “under 50%” search and “Maybe … much less”. Bartz said: “They are 90% search. That’s a fact.” What does Google say? In a post from September 2009 called ‘Now S-U-P-E-R-sized!‘ on Google’s blog, Marissa Mayer said: “Search, that is. For us, search has always been our focus.” (The first word, ‘Search’, is a hyperlink and goes to http://www.google.com) “Google has always been first and foremost about search”. She also wrote a post called ‘Yes, We are still all about search‘ in May 2006.

    Over the past decade, Google’s offerings have come to more and more closely resemble Yahoo’s (a web-based mail system, news, financial information). You can parse Bartz’s words all you like, but the simple fact is that Google makes an enormous amount of money from the text ads they place on their SERPS, the Content Network ads they place when you’re searching around on the web, and so forth. If Mayer claims that “Google is all about search”, then I think its fair for Bartz to claim that Google is “90% search”.

    Given how similar Google, Yahoo and Bing are becoming to each other in offerings (though not necessarily quality), what you should be taking Bartz to task for is not claiming that Google is 90% search, but for claiming that Yahoo’s offerings are substantially different.

  • http://searchengineland.com/ Danny Sullivan

    Bradd, it was the first link in the first sentence of the story, the word “interview.” Here it is directly:

    http://techcrunch.com/2010/05/24/carol-bartz-talkes-with-michael-arrington-at-techcrunch-disrupt/

    Mayer’s not CEO of Google. She’s VP of Search Product and User Experience. She lives and breathes search, mainly. Which is good, because no one is disputing that Google is a major search player, with a major emphasis on search.

    What I’m saying is that Google is not exclusively search. That’s just simply a fact, unlike what Bartz stated to be a fast.

    We don’t know that 90% of its revenue comes from search. We know 90%+ of its revenue comes from ads. Those ads are placed on search products as well as other products that Google owns or effectively rents from others.

    If you’re going to pit Bartz describing Google against someone at Google describing Google, then she goes up against her counterpart — Eric Schmidt. Ask him what Google does, and he has a short, easy answer: Search, Ads and Apps. Those are Google’s three major product areas.

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