There’s a new bit of text on Google.com today that reads: “New! The G1 is on sale now.” It includes a link to where users can “Learn about the phone.” Why is this worth noting? Because over the summer Google CEO Eric Schmidt told CNBC’s Jim Cramer that Google doesn’t put ads on its home page because “people wouldn’t like it.” “We prioritise the end user over the advertiser,” he said.
Our view is that if it looks like an ad and works like and ad, it’s an ad. Google’s G1 link is an ad.
As a user, however, we must allay Schmidt’s concerns, and say we don’t mind the ad. Truth is, we hardly see them anywhere anymore. Shareholders might mind, though. Schmidt told Cramer that an ad on Google.com could earn the company “some number of billions of dollars” a year.
One billion is the smallest “number of billions of dollars” you can have*. That means for its first ever ad on Google.com, Google is giving T-Mobile at least $2.7 million in free advertising today. Maybe.
For a more conservative estimate, figure that a fourth of the 45 million U.S. visitors ComScore says go to Google properties each day go through Google.com. We figure Google could charge T-Mobile a $25 CPM, or cost per 1,000 impressions, against that traffic and earn around $281,000 today.
The real amount: Somewhere in the middle?
At any rate, we bet that if instead of a free ad for T-Mobile, Schmidt agreed to put an Anheuser-Busch banner below the Google search — as Cramer suggests in the clip below — Google’s Taipei office could keep its Friday afternoon parties and, better yet for shareholders, Schmidt could tell interviewers that Google earns more than just 1 per cent of its revenues from something besides PC-based search ads.
* We decided this only after some debate. You might think two billion is the smallest number of billions you can have, like I did, but Dan Frommer reminds me that Schmidt probably never would have said “some number of billion of dollars.” Then again, zero is a number, too. But if Schmidt is talking about a fractional number of billions, he’s in even more trouble.