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Google set to break the $1bn barrier
Paul McIntyre
May 21, 2009
IT'S notoriously secretive about its business dealings but media observers are tipping online search monster Google will be the first internet media company in Australia to crack $1 billion in revenue, probably this year.

That will make Google bigger than the entire commercial radio sector in its own right, and bigger than the total magazine and outdoor advertising markets.

Google's general manager, Australia and New Zealand, Karim Temsamani, would not be drawn on the company's revenue base but most major media buyers are in agreement: Google's 25 per cent-plus annual growth rate and dominance in consumer search will see it crack the figure this year.

"It looks like they'll do it this year," said Lee Stephens, chief executive of Aegis Media. "When you look at their share of the (advertising) market, roughly around 94 per cent, look at the market growth in paid search, add in Google's corporate services revenues on top of that and do the basic sums, $1 billion is what you're looking at. It will be within a whisker."

Interactive Advertising Bureau chief executive Paul Fisher concurred. "It's quite possible Google could do that, although I will say we'll never know their figures, which is rather frustrating. If the industry continues to grow percentage-wise in the mid to high teens, which I think it will, we will get very close to $2 billion. Search and directories is 51 per cent of the market, so you would have to say Google will get very close to that mark."

Although most industry players applaud Google's rapid ascent to the billion-dollar club, some remain concerned about its market dominance. At least 92 per cent of all user searches in Australia are done via Google, making it one of the most concentrated Google markets in the world. "It's unusual in an advanced market to have a competitor with such a monopoly," Mr Stephens said.

Just why Australia is so fixed on Google still generates plenty of debate. "Australians are lazy," said one prominent industry executive who did not want to be named. "It's just become a default service and Aussies love an easy option. But if you've got a 92 per cent share, just like Kevin Rudd's approval rating, it's only going to go one way."

According to comments Google executives have made in the market, Australia is in a similarly dominant position to Britain, Spain, France and India, which all boast a share between 89 and 92 per cent.

Mr Temsamani would not comment on specific data but said countries like Korea were proving more difficult for Google as users tended to favour portals for internet searching rather than "more open" markets like Australia.