Google AdSense: The Greedy Billionaire 8-Year-Old

Google AdSense LogoGoogle's second largest revenue source turned 8 yesterday and despite its $2.5 billion contribution to the company coffers last year, it still causes pushback from the online world for click fraud, its financing of the spamming of the web, and its total lack of transparency.

I remember well that June eight years ago, when this new method of monetizing your published content hit the web. The main sources of income for sites prior were display ads and affilliate marketing, for those not selling products or services directly. The forums were abuzz and all sorts of news and commentary were being written, many with the new code proudly included.

It was the start of the content gold rush and the beginning of the flooding of web with lots of boringly similar MFAs (Made For AdSense sites). Basically, Google created the mechanism that clogs its own data centers and overwhelms its own spam battlers. Content generators and keyword click number and price counters were created, blog software was a hot item and niched sites were springing up everywhere.

The problem of this balance between organic search, advertising revenue and large content providers has been there from the start. As one of the Search Engine Watch forum members noted in 2004:

"Google has to keep this of value or 'not worth the risk of losing' for publishers or their fraud rates will go up and AdWords clients will either opt out of the network or lower their bids to compensate. A fine line exists between maximized distribution and greed. Greed kills anything it's connected with and AdSense is no different.

If G turns this program into so much mush, it's the perfect opportunity for Yahoo to jump on the bandwagon and announce that they have something different, offer higher returns, and yank G's ol' carpet out from underneath them."

Well Yahoo lost the plot, but "so much mush" would describe most sites now carrying AdSense code.

The Panda purges over the last couple of months may have cleaned some of these sites out of the search results - or buried them deep enough that they no longer make money from AdSense, and no doubt Google hopes are not worth continuing paying for hosting.

Applied Semantics, formerly Oingo Inc., was purchased by Google in 2003 and this technology was used to create AdSense, along with work from the AdWords engineers.

There have been attempts to test CPA (cost per acquisition) and this affiliate type of marketing is now being done separately under the Google Affiliate Network. While this may be a purer methodology, the AdSense program is too well established and now represents more than 30 percent of Google's total revenue.

AdSense is an 8-year-old and even in this era of online companies being worth billions after a few years, the program is hugely successful and isn't going anywhere.

"For the last eight years, we've relied on your product feedback to help us improve, your success stories to inspire us, and your content to enhance the ecosystem of the world wide web. We look forward to growing older and wiser with all of you for many more years to come!" the AdSense blog noted.

About the author

Frank Watson has been involved with the Web since it started. For the past five years, he headed SEM for FXCM -- at one time one of the top 25 spenders with AdWords. He has worked with most of the major analytics companies and pioneered the ability to tie online marketing with offline conversion.

He has now started his own marketing agency, Kangamurra Media. This new venture will keep him busy when he is not editing the Search Engine Watch forums, blogging at a number of authoritative sites, and developing some interesting online community sites.

He was one of the first 100 AdWords Professionals, a Yahoo and Overture Ambassador, and a member or mod of many of the industry forums. He is also on the Click Quality Council and has worked hard to diminish click fraud.