Google comes clean with dubious ad revenue sharing pattern

However, the above revenue sharing pattern is only for ads published in third-party websites. Published data show that in 2009, ads shown next to Google's own services brought in $15.7 billion in revenue last year compared with $7.2 billion from marketing messages that Google distributed to other websites.

The company said its revenue sharing pattern for its AdSense service hasn't changed since it was introduced in 2003. The revenue sharing pattern for search-ad service has also remained unchanged since 2005, Google said.

Follow us

"We hope this additional transparency helps you gain more insight into your business partnership with Google. We believe our revenue share is very competitive, and the vast number of advertisers who compete to appear on AdSense sites helps to ensure that you're earning the most from every ad impression," Google said in its blog post.

Though the announcement has come as a welcome step in the wake of publishers and regulators calling for greater transparency from the company which enjoys a dominant position in internet business, many people claim that the pie-splitting announcement is nothing but half-truth as neither Google has backed up its claim with any evidence nor has it offered to explain how it came to such a figure.

"As an individual publisher, I don't see this announcement as a wow moment or as specially helpful. Actually, it doesn't say much about what we as individual publishers can expect as rev share," one person blogged.

"What I understand from the article is that 68 percent of the *aggregated* revenue from *all* the advertisers is payed to publishers. I didn't get from the article how they came to that 68 percent figure. Is it an average, mean or mode?"

"If this number is a simple average (i.e. total ad revenue divided by total number of publishers) then it is not an useful figure for individual publishers. For example, it may mean that a handful of huge publishers are getting a revenue share of 90 percent, a fair number of medium publishers are getting 50 percent and the vast majority of small publishers are getting 20 percent," the blogger wrote.

Also the fact that Google has failed to mention how much revenue it shares with publishers who use AdSense for mobile applications, feeds, and games, shows that there is a long way to go before Google can appease the tons of smaller publishers and companies who run Google ads without knowing exactly how the income is being shared.

Analysts also said Google came clean with its revenue sharing pattern to drum up support in the wake of recent developments, which exposed it to the risk of being branded as "an evil company."

According to technology analyst Rod Enderle, Google, which has also come under intense scrutiny from lawmakers, regulators and privacy watchdogs, is trying to get people to "look at them in a more balanced and positive way so they don't get pounded by politicians."

Some people, Enderle said, have started thinking of Google as "the evil company," in the wake of two recent developments: while its $750-million acquisition of mobile advertising startup AdMob raised antitrust concerns, collection of private data over unsecured WiFi networks through its Street View application drew privacy complaints.

"Google has lost control of its image. People have trouble investing in a company that has a declining image," Enderle said, adding that often a company, whose image has taken a battering, resorts to commissioning economic and other reports for public support.

A classic example is Wal-Mart, which in 2004, while facing stiff public and union opposition to its plans to open 40 Supercenters in California, had rolled out full-page ads in major newspapers emphasizing its contributions to the Golden State. The ads noted that the company handed over $650 million in California sales tax revenue the prior year and bought more than $8 billion in goods and services from 4600 state businesses.

Shares of the Nasdaq-listed Mountain View, California-based company closed 0.02 percent down at $477.07 Tuesday.