Google Touts Economic Impact of $645M for Utah — Internet Giant Brushes Aside Critic of Its Motives

Wed, May 26, 2010 at 9:37 am

    Search engine Google, that ubiquitous Internet presence, on Tuesday released an extensive report detailing how it generated $54 billion in U.S. economic activity during 2009 — including $645 million within Utah.

    It said the money can be counted through evaluating the impact on 22,100 Utah businesses that have either advertised on Google or through websites that benefit from the advertising.

    Google’s report also said 20 Utah nonprofits got $630,000 worth of free-advertising grants from the Internet giant.

    The announcement drew an immediate response from a nonprofit consumer-advocacy organization, Consumer Watchdog. The group said Google’s motives in releasing the report were driven by “its attempts to quell worldwide outrage over the WiSpy scandal” and that this is “classic corporate PR spin to divert justified criticism.”

    Google said earlier this month that its vehicles that drive down streets in major cities filming for its Street View feature had unknowingly collected users’ data from WiFi networks. Some critics believe this is an invasion of privacy.

    In response, Google spokeswoman Rebecca Ginsberg said in an e-mail that Google’s “report speaks for itself. It’s hard to discount the incredible impact that these small businesses are having on their local economies.”

    At least one Utah businessman says he doesn’t doubt Google’s numbers or its impact.

    Advertising on Google “gets us out there,” said David Green, an executive at Logan-based battery retailer Batteryheads. “I’m convinced that the money I put into it comes back to me with a return.”

    It works this way: Advertisers such as Batteryheads bid for placement on a series of small ads that pop up at the top and along the sides of a page of results found from an Internet user’s search. If someone is searching for companies that sell batteries for, say, laptops, Batteryhead’s ad would appear on the results page.

    “If you bid the highest, you get the highest spot,” said Green. “I don’t bid the highest, but we’re there and we get a lot of hits, and a lot of sales result from those hits.”

    The power of Google comes home to advertisers when compared to some forms of print advertising, he said.

    “We spent $300 once for an ad in the student newspaper at Utah State University. We got one call from that ad, and the caller did not buy anything. If I spend $300 with Google, I can get exposure for three days that might generate 3,000 clicks and between 35 and 40 sales.”

    According to a report from Bloomberg News, Google reported $23.7 billion in revenue last year and is facing competition for ads from rivals such as Facebook Inc. and Twitter Inc. Bloomberg said that according to ZenithOptimedia, a London-based ad buyer, the “Internet’s share of advertising spending is forecast to rise to 17 percent in 2012 from 13 percent last year.

    Google said in its report that it believes a business gets $8 in profit for every $1 it spends on Google advertising.

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