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The remaining portion that we keep reflects Google's costs for our continued investment in AdSense Where did Google's honesty go? Google is wildly profitable.

The remaining portion that we keep reflects Google's costs for our continued investment in AdSense Where did Google's honesty go? Google is wildly profitable. This post tries to convince you that they charge you for their costs only. That's just plain misleading.

nostromo 16y ago
"Reflects" is the key word here. Of course they keep a profit as well.
- alain94040 16y ago
  I disagree. It says it "reflects their costs". The key word is cost. That's clearly bogus if you make huge margins, it can't be qualified as cost. The statement would be fair if most of the money would go to real costs, and they would keep a small profit margin on top. That's not the case at all.
  - Raphael 16y ago
    A reflection is only identical if the mirror is perfectly flat.
patio11 16y ago
A core part of Google's PR strategy, brand image, and even self-conception is that they're just a bunch of cuddly academics carrying the lamp of knowledge to the world and not, oh, a multi-national advertising firm with 35% margins.
robk 16y ago
You're misreading the tone of the post. Google isn't a charity. Their portion of the revshare includes a portion profit and a portion of the cost of adserving.
- skinnymuch 16y ago
  The difference is how wildly profitable Adsense is. The sentence does not at all give this intent and I would assume anyone reading this post without a lot of Google-finance-knowledge would not expect their margins to be as high as they are.
jedberg 16y ago
That's cost for future R&D -- they don't pay a dividend. All that money goes in the bank. They did say "costs for our continued investment in AdSense". Profit is the continued investment part.
- skinnymuch 16y ago
  jeddy jed jed (are you cool with being called that?) - it looks like you are technically right, but Google perfectly worded the sentence to make it sound like they are not making a huge profit, but instead are simply covering costs. I also strongly believe this is and was their intent.
  - jrockway 16y ago
    Wow, are you saying that a writer working for Google is trying to portray Google in a positive light? Talk about a conspiracy!!!
    - skinnymuch 16y ago
      Thanks for you comment, but I don't see the need for the straw manning you pulled. I'd at least be able to understand the apparent contempt in your comment if it looked like there were a decent amount of comments in this thread that weren't doing exactly what I did by writing the obvious. On a side note - cheer up man, life is too short for negativity on a personal level.
JacobAldridge 16y ago
Doesn't mention the words Profit or Value, which is either bad business practice (I doubt it) or a touch of being disingenuous. Some of that revenue goes into profit as you note, even if that profit is then reinvested. And fee structures should never change only because costs have change, which they indicate may be the case. If you start delivering more (or less) value, it's fair to increase (or decrease) your price / revenue share. Focus on value, not on costs, and you will build a much more profitable business.

nostromo 16y ago

"Reflects" is the key word here. Of course they keep a profit as well.

alain94040 16y ago
I disagree. It says it "reflects their costs". The key word is cost. That's clearly bogus if you make huge margins, it can't be qualified as cost. The statement would be fair if most of the money would go to real costs, and they would keep a small profit margin on top. That's not the case at all.
- Raphael 16y ago
  A reflection is only identical if the mirror is perfectly flat.

patio11 16y ago

A core part of Google's PR strategy, brand image, and even self-conception is that they're just a bunch of cuddly academics carrying the lamp of knowledge to the world and not, oh, a multi-national advertising firm with 35% margins.

robk 16y ago

You're misreading the tone of the post. Google isn't a charity. Their portion of the revshare includes a portion profit and a portion of the cost of adserving.

skinnymuch 16y ago
The difference is how wildly profitable Adsense is. The sentence does not at all give this intent and I would assume anyone reading this post without a lot of Google-finance-knowledge would not expect their margins to be as high as they are.

jedberg 16y ago

That's cost for future R&D -- they don't pay a dividend. All that money goes in the bank. They did say "costs for our continued investment in AdSense". Profit is the continued investment part.

skinnymuch 16y ago
jeddy jed jed (are you cool with being called that?) - it looks like you are technically right, but Google perfectly worded the sentence to make it sound like they are not making a huge profit, but instead are simply covering costs. I also strongly believe this is and was their intent.
- jrockway 16y ago
  Wow, are you saying that a writer working for Google is trying to portray Google in a positive light? Talk about a conspiracy!!!
  - skinnymuch 16y ago
    Thanks for you comment, but I don't see the need for the straw manning you pulled. I'd at least be able to understand the apparent contempt in your comment if it looked like there were a decent amount of comments in this thread that weren't doing exactly what I did by writing the obvious. On a side note - cheer up man, life is too short for negativity on a personal level.

JacobAldridge 16y ago

Doesn't mention the words Profit or Value, which is either bad business practice (I doubt it) or a touch of being disingenuous. Some of that revenue goes into profit as you note, even if that profit is then reinvested. And fee structures should never change only because costs have change, which they indicate may be the case. If you start delivering more (or less) value, it's fair to increase (or decrease) your price / revenue share. Focus on value, not on costs, and you will build a much more profitable business.