Google Claims to Have Generated $54 Billion in Economic Value for the U.S. In 2009

Google’s Marketing machine googlepublicpolicy, posted on YouTube (Google is the parent company of YouTube) today, claiming to have impacted the U.S. economy by with a $54 billion dollar increase in value. Ranked as the number one top site on Alexa.com, Google is the number one search engine globally. Estimating an eight dollar of profit for every dollar spent, Hal Varian, Chief Economist at Google, breaks down the formula by adding up the total value of Google’s marketing tools, Google Search, Google Adwords, and Adsense. Varian breaks down the data further, by detailing the profit and loss for each of Google’s tools. Basing the estimation on how much advertisers are willing to bid for clicks taking with the caveat that the estimation is only based on the assumption that an advertiser is not loosing any advertising dollars on wasted clicks. Although the numbers are not exact, Varian bases them on a big random sampling of the advertisers that use the Google Adwords product.

In addition to Google Search, Adwords, and Adsense, Varian includes Google Grants into the calculation as well as an estimated value of a search result. Quoting weblog analysis Bernard J. Jansen and Amanda Spink, that web surfers, click 5.3 times more search result clicks than ad click. Meaning that if you surf for a product, you will most likely notice that product will come up twice. Once as a paid ad at the top of the Google search page in the advertising section highlighted in a light beige box in the background, and once again somewhere below in the general search results. That based on Jansen and Spink’s research, a surfer is 5.3 times more likely to click on the natural (non-paid) result rather than the advertisement at the top of the page. Varian swiftly remarks that the natural search result clicks are not as valuable commercially as the paid advertising, and using as a ‘conservative’ estimate, reduces the value of a natural search result to about 70% the value of an ad click. Wrapping everything up, the video leaves off stating that they total up by state Google’s estimated economic growth.