David Jackson on Google’s (big) bucks

Former hedge fund guy and financial blogger deconstructs the G’s earnings call. Couple highlights from DJ (more here):

  1. Google cut the proportion of revenue it pays to its AdSense partners to 77% from 85% a year earlier. Will this generate the same hostility from partners as eBay’s recent price rise?
  2. Google’s AdSense program generated almost as much revenue as its search business ($490 million versus $530 million) and grew at almost the identical rate sequentially. AdSense is underappreciated by investors, since Google’s competitive position in contextual advertising is arguably more secure than its position in search.