Google: We drove $80B in U.S. economic activity last year

   The company says that it was able to tally that mark for 1.8 million businesses, Web site publishers, and non-profits across the U.S.

by Don Reisinger

July 2, 2012 9:45 AM PDT
Google is driving serious economic activity in the U.S. -- at least, that is, according to Google.
The search giant today unveiled its 2011 Economic Impact report, and said that its search and advertising tools, including AdWords and AdSense, drove $80 billion in economic activity across the U.S. last year. The company said it reached that figure with help from "1.8 million businesses, Web site publishers, and non-profits across the U.S."
In order to arrive at that figure, Google used some fancy math. The company estimates that businesses that use AdWords make $2 in revenue for every $1 they spend on the advertising platform. In addition, the company assumed that a business will receive five clicks in search results for every one click on their ads.

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"If search clicks brought in as much revenue for businesses as ad clicks, these two assumptions would imply that businesses receive $11 in profit for every $1 they spend on AdWords," the company said. "This is because, if advertisers receive 2 times as much value from AdWords as they spend on AdWords, and they receive 5 times as much value from Google Search as they do from AdWords, then the total profit they receive is 11 times what they spend."

Google also included how much it paid to Web site publishers in 2011 via AdSense and the impact its Grants have on the companies to which it awards its cash. Google did not include the economic impact of Google Maps and YouTube.
Of course, it's anyone's guess whether that $80 billion figure is remotely close to the truth. Google's creative math aside, it's impossible to know exactly what companies are generating from their work with the search giant. And to simply attribute revenue to a particular product when firms often use multiple means to drive business can be difficult.
Google isn't the only company to try to use certain measures to announce a financial impact. Back in March, in fact, Apple said that it has been able to create or support 514,000 jobs. The company came to that figure by including jobs it claims to have created in the package-delivery business and transportation, among other industries.
What's not clear about Google's announcement is why the company decided to release that data now. There's little debating that the company is successful, and it has indeed helped create and drive businesses. But in the vast majority of cases, companies typically don't tout such figures.
Perhaps, then, there's a reason Google announced the figures. Could it be that it's facing intense regulatory scrutiny in the U.S. at the hands of the Federal Trade Commission? Is it trying to remind politicians about how important the company is to the country and to third-party businesses? Or is it simply that Google wants to brag a little?
CNET has contacted Google for comment on its economic impact study. We will update this story when we have more information.