Doing the Google Front-Page Math

The WSJ reports that the front-page ad inventory at Yahoo!, MSN, and AOL now sells out months (or even years) in advance and that, even at MSN, prime placements can command $1 million a day.  So this is good news for future revenue at all three portals, and it's also good news for Google fans.  Because even though Google will insist until the cows come home that it would never insult users by forcing them to look at an advertisement when they arrived at the site, it's nice to know that the company could simply flick a switch and generate, let's see...

2-3 prime placements at a time

X

$1 million per placement (and there would probably be a Google premium)

X

365 days a year

=

approx. $700 to $1.1 billion a year in incremental, super-high-margin revenue. 

Not bad for flicking a switch.  And that's just the front page...

Comments

[Ian Holsman]

Aren't you assuming that people will come back once they see such a interstital?
Google has 2 things for it. Brand/(Loyal followers) and a good product. If they lose either they will be in trouble.

[aaron wall]

Google originally had no ads on the search results. Then they placed one or two up top. Then they ran up to 8 more down the right column. Then they started using up to 3 at the top on highly commercial results. Then they recently (last couple weeks) started testing a couple more at the bottom (randomly for a limited number of users).

That is about as much advertising as you will find on Yahoo! or MSN's search results. I can't see how Google can fit any more ads than that in the search results.

As far as putting other companies ads on the home page I think they would only do that if they were desperate, and that would equate to a strong sell signal to me.

Just think of it this way...what can they make more off of, a targeted advertisement or an untargeted advertisement?

They have already been running ads for the Google Toolbar on the home page (which locks in searches for MANY TARGETED ADS), and the personalized page
http://www.google.com/ig?complete=1&hl=en
lets you customize the home page layout, but I can't see regular ads on Google's default homepage anytime in the coming decade.

If they do it I wouldn't be surprised if another young upstart takes their market position.

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