The Meaning Makers: Google

Posted on | July 12, 2010 | No Comments

As I mentioned previously, my talk in Hawaii about Internet TV turned into a discussion of Google and its increasing dominance of the advertising industry. In particular, how Google was porting its advertising technologies into an integrated ad management system that includes online, audio, and video. TV is about to turn into “Smart TV” with Google as the major “packager” of its video content, providing the results of searches and associated advertising.

Advertising reached global sales of $377 billion with 40% ($151 billion) of total advertising sales coming through television sales and another $61 billion through online advertising. Global spending on paid search amounted to $29.79 billion, or 48.8% of all online spending according to www.magnaglobal.com. It is likely that online advertising will overtake newspapers as the second-largest advertising medium by 2013, and total $103 billion in 2015.

Google pulled ahead of its search ad rivals due to a couple of algorithmic innovations that still remain largely proprietary, and its adoption of auction theories for selling advertising. Steven Levy’s article on “Secret of Googlenomics: Data-Fueled Recipe Brews Profitability” in Wired Magazine gives a great introduction to what may be the most extraordinary business idea ever devised.

Google’s $23.6 billion in 2009 revenues , 97% coming from advertising, puts it ahead of the world’s largest advertising holding companies: Omnicon, Publicis, WPP, and Interpublic. Yet it sees additional opportunities such as Internet TV. Television’s global advertising revenues of $151 billion is expected to grow significantly. That figure represents a major growth potential for Google.

As TV becomes part of the link economy, every click represents an intention, an interest, a bit of meaning that is stored in Google’s huge data bases located around the country in huge data farms. Google’s goal of “organizing the world’s information” looks to be on schedule.

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Anthony J. Pennings, PhD has been on the NYU faculty since 2001 teaching digital media, information systems management, and global political economy.

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