Where Did the Google Calculation Come From?

One of the most difficult questions related to technology startups is potential revenue. Everyone does all sorts of projections showing what they think they will make over the first five years, and quite frankly they are all WAGs (Wild Ass Guesses). None of us have a crystal ball, although our projections are based on solid metrics, it’s all still a guess.

Google Plus AdaptifyedIn this case, however, Google’s Adsense team, and their profit & loss statement gave the starting point for a calculation of the system’s potential. According to their profit & loss statement, Google’s revenue for the 4th quarter of 2015 for the Adsense Publisher’s Network (only) was $4.14 billion or 28% of Google’s total revenue.

During the Adsense publisher’s meeting, the Adsense team was aiming at a 20-25% increase in the publisher’s revenue through small changes in ad placement and ad type. Since the Google strategists assumed a 20-25% percent increase was realistic for those metrics, then our assumption was that a 12% increase in Google’s Adsense Publisher’s Network revenue from the opening an entirely new set of advertising real estate was a reasonable starting point for our calculations.

Google’s 2015 4th quarter revenues were $4.14 Billion, and a recent search for PDF files yielded 1.19 billion files. And this only PDF files! Add in even a couple of the other downloadable files types and the numbers become even more impressive. This huge pool of new advertising assets could represent a potential quarterly revenue increase of $496.8 million ($1.99 billion annually) in the Google’s Publisher Network.

ADAPTifyed is not just monetizing a file once, but every time a file is downloaded (the instance of download), which could actually reach trillions of instances per year.

The Google Calculation