Google counts on “old” media for content

October 18th, 2008 in Online Marketing- International

Jane Schulze, Media editor | October 18, 2008

GOOGLE says it wants “old” media to remain robust so it can continue generating searchable content.

Karim Temsamani, the Australian and NZ general manager of the world’s largest internet search engine, told a Trans-Tasman Business Circle lunch yesterday there was a symbiotic relationship between the online and offline media.

“Online advertising revenue is growing very strongly, and some of the projections for the traditional media are not great,” he said.

“But at the same time we worry about it because we want a very strong traditional media in the market because they drive a lot of the good content.”

Mr Temsamani, who previously ran Fairfax Media’s magazine arm, said about 60 per cent of searches were linked to articles people had read.

“A lot of newspapers drive strong online content and you need this content to get the users to come online to get the information,” he said.

“(So) we want a shift to happen but for it to happen in a proper way with regards to advertisers getting the right return on their investment and continuing to invest in offline media — because they continue to drive a lot of searches.”

But at the same time Mr Temsamani said “more and more” of advertisers’ budgets were moving online. “And we are taking a very large share of that. People are getting more analytical about where they are spending their (advertising) budgets, so we provide the right systems to provide that interaction. We believe search will continue to grow strongly and advertisers will continue to shift their budgets to search.”

And while search was “very much” the basis for their business, Mr Temsamani said Google was also developing new revenue streams from the growing number of applications it produced.

“A lot of the things we launch, like Google News, enable us to create a bigger online ecosystem. We like launching products people use so they spend more time online,” he said.

And some of those applications, such as spreadsheet tools, were sold to businesses.

“We provide ten times the storage at one-tenth of the cost and we provide better applications,” he said. “We believe very strongly in the model and because of this infrastructure and the lower cost of the applications to companies over the future, we will see different revenue streams come for Google around those products.”

Mr Temsamani told the lunch the three drivers of increased internet use were faster internet speeds, the “democratisation” of internet tools and the falling cost of storage.

“What is critical to understand about what Google has been doing is how we have built a very large-scale infrastructure (which enables increased storage),” he said.

And he said improved storage technology also enabled consumer devices to improve. For example, he said, the iPod available in 2019 would carry all the music ever produced in the world, and a few years later the same device could carry all the video content created in the past 85 years.

He also said Google’s purchase of the video sharing site YouTube highlighted that “we see display advertising and video as a very important part of the ecosystem going forward”.