Google: US Economic Impact is $54.1 Billion Yearly

Numbers do not reflect how much it costs in lost productivity

By Jackson West
|  Wednesday, May 26, 2010  |  Updated 5:53 AM PDT
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Google: US Economic Impact is $54.1 Billion Yearly

Jeff J Mitchell

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Google and its ever-growing cadre of Washington lobbyists are in the nation's capitol pressing their case that the company isn't a behemoth that needs regulating, but a benign enabler of America's economic engine.

So the global online sales team enlisted the company's in-house economist, Hal Varian, to estimate just how much economic impact the company creates.

Varian came up with $54.1 billion by calculating estimates of how much a business can expect in revenue from advertising and regular search, and extrapolated based on Google's AdSense and AdWords revenue, and added the money paid to online publishers that run Google ads and Google's Grant program for free ads given to non-profits.

California is a big part of that, with $14.1 billion in business generated annually. Of course, you can add to that all the business generated by wealthy Google employees and the company's business operations.

But might you also subtract? Time management software developer RescueTime calculated that the version of Pac-Man that appeared on the company's homepage to honor the game's anniversary cost over $120 million in lost productivity based on assumptions no less arbitrary than Google's.

Google has come under close scrutiny by federal regulators thanks to its dominant share of the online search and advertising market. The Federal Trade Commission recently approved Google's acquisition of mobile advertising company AdMob, so the charm campaign seems to be working.

Jackson West has never made a penny directly from Google advertising.

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