A Reminder: Google's Economic Impact in Massachusetts
Google has been feeling the heat lately. The company is tangled in snarl of antitrust and privacy concerns and was targeted last week in an investigation by the FTC. So the timing was juuuuust perfect for the kingfish of search engines to toot, blow, and blast its own horn, reminding us all how damn important it is to our fragile economy.
Google, using its very own in-house math and calculations, proudly announced that it driving a whopping amount of economic activity in Massachusetts and throughout the country. And during an era when bust is more common than boom, Google’s numbers are rising every year.
According to its figures, Google’s search and advertising tools provided $3.7 billion of economic activity in Massachusetts in 2011 for 53,000 businesses, web publishers and non-profits — enough for every resident to see the Sox play at Fenway 10 times. That amount makes up 4.6 percent of the total $80 billion in economic value that Google drove throughout the entire United States. In Google’s state-by-state rankings, California finished first with $20 billion and New York was second with $11 billion.
These numbers were conjured using several assumptions, Google admits. The company figures that a business earns $2 for every $1 it spends on the Google tool AdWords, which places paid advertisements on the right side of search results pages, and that a business gets five clicks on a search result for every single click on a paid ad. Together, says Google, a business makes $8 in profit from AdWords and search results for every $1 it spends. The total numbers in the company’s economic impact report, therefore, were determined by multiplying what advertisers spent by eight.
Still, the amount of money connected to Google in Massachusetts keeps rising every year. In 2009, the company provided $2.2 billion in economic activity to 43,000 businesses and non-profits and in 2010 it produced $2.7 billion for 48,250 businesses and non-profits. 2011 saw the biggest rise to date, leaping up $1 billion to $3.7 billion.
People who cover the industry, however, are scratching their heads as to why the company, which is undoubtedly successful and certainly doesn’t need to publicly gloat, bothered to send out this report in the first place. When asked about it by CNET, Google said it “first released our economic impact numbers for 2009, and we plan to continue releasing them annually.”
See, the timing of all the bad stuff like an FTC investigation had nothing to do with it at all.