Google Says It Generates $54 Billion for U.S. Economy

Google Inc., owner of the world’s most popular search engine, generated $54 billion in U.S. economic activity in 2009 as businesses turned to online advertising amid the economic slowdown.
The Internet company helped generate revenue for advertisers, website publishers and nonprofit organizations, Google said in a report released today. For the first time, it broke down its economic impact in all 50 U.S. states, with California getting the biggest benefit at $14.1 billion.

“We make most of our revenue from the ads shown next to our search results, on our other websites and the websites of our partners,” the Mountain View, California-based company said in the report. “Through these ad programs, we help many others make a living, too.”

Google, which reported $23.7 billion in revenue last year, is looking for more customers amid competition from rivals such as Facebook Inc. and Twitter Inc. The Internet’s share of overall advertising spending is expected to rise to 17 percent in 2012 from 13 percent last year, according to ZenithOptimedia, a London-based ad buyer owned by Publicis Groupe SA.

The economic impact described in the report reflects the revenue generated by Google’s search engine and the ads that run next to query results, a program called AdWords. It also includes the amount Google pays to websites that run ads, as well as grants it makes to nonprofit organizations, the company said.

“We conservatively estimate that for every $1 a business spends on AdWords, they receive an average of $8 in profit through Google Search and AdWords,” the company said in its report.
The company said the overall estimates are conservative, leaving out economic benefits such as consumers being able to find information or the effect of spending by local Google employees.