Now the so called stats. According to ComScore research , people around the world searched about 67 billion times in a month (August 2007). Share of Google in that is about 37 billion individual searches. Now I am not a fin geek, but if we assume that the figure above is the average in a month, then about 444 billion searches are done in a year for Google. Now Google's financial results shows that 2/3 of their revenues comes from search and rest is from other means (likes of adsense, adwords etc). Now the figures may get a bit hazier. Google's valuation is $195 billion. Out of which (going by 2/3 principle of Google), i.e. about 64% is coming from searches i.e. about $124 billion. Now if you do some crappy calculations, then you will find that your each search is about 27 cents. Amazing!!

So each time, you google something, you are actually adding 27 cents to Google's valuation. (P.S.- Did you know that you can get all this calculations from google search too).

Now some of the points which we may have forgotten in between.

- How much does Google incur to provide all these- I guess not much because of the fact that marginal cost will diminish every time.
- Remember Kevin Roberts - Now he's the CEO of Saatchi & Saatchi. He places Google in top rank of his concept called lovemarks i.e. Loyalty beyond reason. Now do I have to explain you further that where am I going.
- Noise of clicks- Now how about this: 31.5 million seconds of search clicks in a year i.e. about 14,000 searches every second @ 14 kilohertz. Yikes. Just think about the sound of all those clicks.

## 5 comments:

is that 27 dollar cents or 27 euro cents ?

Also, did you take into consideration facts like inflation, value of hardware and its inflation, increase in the number of internet users, cost of bandwith usage etc...

All these things form key points when one calculates something as blanket as this.

Kundan

+31.626.335.116 (M)

Its $0.27 i.e. 27 cents. Now talking about inflation n all, den i have to give you the figures of all the countries which is beyond the scope of this small article..isn't it...n more or less its about stagnant data from august,07 and its financial press release of google..

hi sam

i think valuation is not the basis for estimating how much a single google search costs. It represents value of ur assets and liabilities in fin terms. i think the cost evaluation should be based upon annual revenues. wat u say??

Now to all those smart people for constructively criticizing the valuation part. So here I go-

First of all, calculating how much "G" spends to support search and then divided by the no. of searches to a estimated cost per search. Along with that "G's" Total Market Value (basically it has inflated to a skyrocketing 50 times its earnings) determined by its stock price and divided it by the no. of searches to get the value per search.

The three methods which can be used to validate the calculations were:

(1) Use a conservative multiple of earnings as the total value.

(2) Use only the earnings from search divided by number of searches.

(3) Determine how much time an average search saves, multiplied by an hourly wage.

I hope I have suggestively answered back your queries. And still if I have not quenched your thirst then surely give me buzz.

hii why r u reacting so negatively ! getting comments is a good beginning man , commentors are gods ;-)

btw google earns 2/3 reveue frm searches? i thought it earned most revenues frm adsense

btw nice effort ! though i didnt have the brains to undrstand the financial calculations :-)

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