Google's first quarter results were spectacularly good and certainly blew away any thoughts of faltering performance from our favourite search monopoly.
Deep in the numbers is the performance of Google UK.
"Revenues from the United Kingdom totaled $803 million, representing 15% of revenue in the first quarter of 2008, compared to 16% in the first quarter of 2007 and 14% in the fourth quarter of 2007."
So year on year share of revenues from the UK have dropped by 1%. But that reflects greater earnings growth in other less mature markets rather than any inherent weakness in the UK.
A year ago, Google's Q1 2007 results showed UK revenues of $578 million. My maths is a bit shaky, but that looks like a fairly healthy rise of around 40% year on year. An ordinary company would be pretty happy with that, although it's a little less than the global increase in revenues of 42%. Over the past 12 months sterling has appreciated a little (around 1%) against the dollar, which takes a tiny bit of shine off the numbers, but they still look very healthy.
All the same, Google seems determined to extract as much revenue as possible from paid search in the UK. Hence the impending change to bidding on trademarks, which is likely to drive up bid prices on brand terms for most large companies.
Last August we also saw some changes to the top ad placement formula on Adwords. Instead of looking at actual CPC when calculating the cost of a top ad placement, Google now looks at the maximum CPC that an advertiser is willing to pay. This will add to the pain of brand owners who will naturally be keen to keep their own brands at the top of the paid search listings.
Finally there is a slow drip of changes to what Google seems to regard as legitimate SEO techniques - a post on seobook (Google Thinks YOU are a Black Hat SEO. Should You Trust Them?) sums up the current state of play very nicely. It might be a cynical way to look at the market, but it looks as though Google is saying that if you can afford to do SEO on any scale, you should be pushing your budget into Google Adwords.
Google enjoys an incredible market share in the UK and all the signs are that it plans to maintain strong revenue growth off its monopoly position. And no one would bet against them achieving that!
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