Tuesday, 29 March 2011
Google?s Value To US Users And Advertisers Is Over $119B Per Year, According To Google
Google's chief economist Hal Varian took the stage today to break down the value of Google to users. He spoke about two elements of value: The value of Google to users and the value of Google to advertisers. In order to estimate the value of Google to advertisers, Varian used a model to estimate the value vx - c(x) (where v = value per click, x = number of clicks and c(x) = cost of clicks) and then did some "back-of-the-napkin" math. The bottom line? Google's value to publishers and advertisers is $54 billion. In order to calculate the value of Google to users, Varian cited a the "A Day Without A Search Engine" study, which plotted students searching for the answers to questions in a library, as opposed to those that used Google to get their information. Students who searched in the library ended up averaging 22 minutes where students using Google took an average of 7 minutes, saving 15 minutes.