Google is big, and if the first quarter is any indication, the company is only getting bigger. Its revenue increased 79% from last year's first quarter to $2.25 billion. That performance followed the full year 2005, when it posted revenue of $6.10 billion, up 92.5% from 2004.
The good news for Google's future is that online search in general is continuing to grow. In March, 6.4 billion searches were conducted on the Web, up 15% from a year earlier, according to comScore Media Metrix.
Even better news for Google is that search queries on its site grew even faster-at a 36% rate-to 2.7 billion in March. Its nearest competitor, Yahoo!, had 1.6 billion queries and grew at a rate of 8%.
But what's truly important for marketers is that search is growing as an advertising medium. Of Google's searches in March, 1.4 billion included a sponsored ad, up 50% from a year earlier, according to comScore Media Metrix.
The power of Google's search engine is that it enables marketers to reach potential customers when they are researching products or, even better yet, when they are ready to buy.
"Approximately 11.4% of Yahoo!'s and 11.8% of Google's searches resulted in a click on a sponsored ad," said Peter Daboli, president-CEO of comScore Media Metrix. "These click-through levels are substantially higher than those seen with traditional banner ads, indicating the extremely high relevance and impact of search-based advertising."
For some observers, Google seems to be maintaining its edge over its competitors because they say it provides better natural search. "It's my belief that they're going to give you a better experience," said John Keck, senior VP-direct and interactive media director at Doner, who said some of Google's competitors still include paid advertisers in the search results.
Google has been especially effective for small b-to-b businesses. Spencer Spinnell, Google's head of business and industrial markets, said that the lion's share of Web visits occur on larger, more well-known sites. What Google helps with is the "enormous long tail of information" on the Internet.
Google has also helped Fortune 500 companies improve their marketing efficiency. EMC Corp., a computer storage company, is a case in point.
The company used Google AdWords to help generate leads and was able to hone the program's effectiveness by using feedback from Google on the most effective keywords. In the first four months of using AdWords, EMC said it boosted its registration figures by 400%.