May 17, 2011

Google's Economic Impact on US Businesses: $ 64 Billion


In association with National Small Business Week, Google has released figures relating the economic impact that its programs like AdWords and AdSense had on the U.S. economy. Interestingly, the numbers come at a time when Google is under fire for allegedly illegally selling advertisements to rogue pharmacies and also for potentially violating consumers’ privacy with their mobile phones.
  • According to the National Small Business Week, 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. 
  • 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).

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