Photo: Dylan Love
A little more than a year ago, Google revealed its display ad revenue for the first time: about $2.5 billion per year.It’s doubled since then — on today’s earnings call, Google CEO Larry Page said that display is on a $5 billion a year “run rate.” In other words, it’s expected to pull in $5 billion in 2012.
That’s great news, since Google has long relied on one business — search advertising — for the bulk of its revenue. Diversity is good.
But this revenue is still not as profitable as search advertising.
As Henry Blodget pointed out last year, Google does not share any portion of its search ad revenue. But most display ads are served through the Google Display Network, and Google has to pay a significant portion — at least 50%, we would guess — to the partners on whose sites the ads are actually appearing.
Also, $5 billion is a big round number, but a fairly small percentage of its overall revenue.
Google booked $37 billion in 2011. That’s up 29% from 2010. So if Google’s overall revenue increases at the same pace next year, to $48 billion, that will be about 10% of its overall revenue.
Meanwhile, revenue from Google Sites — mostly search — was 69% of Google’s business in 2011, up from 66% the previous year.
So search is still king.