Google Says It Generated $54B for U.S. Business in 2009
Google Inc. marked this week's National Small Business Week--an event proclaimed by every U.S. president since 1963 to acknowledge the impact that small businesses have on the country's economy--to disclose that, by measure of its own research, it generated some $54 billion of economic activity for U.S. businesses, website publishers and non-profits in 2009.
Claire Johnson, Google vice president, global online sales, said that the company's search and advertising tools helped more than one million businesses worldwide.
"These are the entrepreneurs and business owners who have grown their companies and expanded their sales using Google," Johnson said, in a video presentation.
"Google search and advertising tools are truly an engine of job creation and economic development," she said.
To calculate its overall impact on the U.S. economy last year, Google offered an economic estimate, based on its own figuring, of Google Search, AdWords, AdSense and Google Grants.
Its findings are detailed in a report entitled "Google's Economic Impact, United States, 2009," a 62-page discussion of its methodology and findings by each state in the country.
To estimate the economic impact of Google Search and AdWords, the company said it relied on two "conservative" assumptions; first, that businesses make a dollar for every dollar invested in AdWords--a conclusion supported by Hal Varian, Google's chief economist, based on cost-per-click activity of of a large sample of its advertisers--and secondly, that businesses receive about five clicks on their search results for every one click on their ads.
Google factored in the value businesses receive from search words and concluded that for every dollar spent on AdWords, they reaped $8 in profit through Google Search and AdWords.
The vendor then multiplied what its advertisers spent times a factor of eight to determine the economic value received, in turn, by those advertisers.
Google said that it figured the economic impact of AdSense as the estimated amount it paid to website publishers for placing ads next to their content, and the impact of Google Grants as the total amount spent by recipients out of the $10,000 per month awarded to them.
When all that calculating is said and done it totals some $54 billion in economic activity across the country attributed in one way or another to Google, the company said.