How much are users $Worth$ to Google?

[rumblepup]

I always wondered this, and I haven't really found any information on this, so I'm wondering what you guys think.

In terms of dollars, how much is 1 Google user worth to Google? In other words, I use Google, everyday. What do I,as a user represent to Google in terms of money from any type of revenue.

Do I represent 2 dollars a day? Or 10 dollars a year, or 50 dollars a month?

I'm trying to figure this out because of all the user-centered moves Google is planning and implementing in the future. Free wireless broadband for one. If that model grows, as I think it should, Google will have a tremendous advantage. What if they just start giving away both wireless as well as 56k, or even broadband? That positions them to do a bunch of stuff that they can make even more money on.

Look at it this way, McDonalds and Burgerking and all the other food joints have combo meals or cheap buy one get one free burger deals. Why? So you will buy their soda. They make almost nothing on a burger, but make BIG TIME money on the soda.

So apply the same principal to Google, which looks like something similiar is going to happen. In this case, their giving away connectivity, to get you to click or buy, what?

How much am I worth to Google?

[Mel]

In terms of cash, virtually nothing since all most all of Googles income is from advertising partners, but since that advertising makes money because of the eyeballs that Google can provide there must be some correlation.

In October Comscore reported that Google had nearly 90 million unique vistors so perhaps someone can base some figures on that.

[janeth]

In terms of dollars, how much is 1 Google user worth to Google? In other words, I use Google, everyday. What do I,as a user represent to Google in terms of money from any type of revenue.

I guess it would depend on how many paid ads you click on in a day. (-:

[crankydave]

Let's see...

Advertising revenue accounts for no less than 98% of their income.

For the nine months ended Sept 05 their revenue was $4.21B

Their net profit for than same period was 25.9%

$4.21B x 0.98 x 0.259 = $1.0686B

$1.0686B ÷ 9 ÷ 90M = $1.3193 a month per unique visitor.

That would make each unique vistor worth $15.83 a year. (approximately)

Dave

[dburdon]

I like Crankydave's attempt to measure value per user. I guess the weakness in any valuation of this sort is that nobody signs up. I recall that at the height of the mobile (cell) phone boom, companies were changing hands at $10,000 dollars per subscriber. I was paying just £80 ($140) per year for the phone and an inclusive 100 minutes per month. I never went over. So in pure revenue terms -without applying a discount - it would have taken 71 years a 5 months to recoupe the $10,000.

In essence, all these valuations rely on averages. Rumblepup needs to workout how many pay per click and banner ads he clicks on and what Google receives in earnings or commissions.

[Thoma]

Looks like crankydave answered the question perfectly.

[Mel]

well yes.... if every one of the users clicks on adwords ads but since I never click on them someone else must be worth $30 per year.

[crankydave]

well yes.... if every one of the users clicks on adwords ads but since I never click on them someone else must be worth $30 per year.

Yes, I should have qualified my answer with average.

Dave

[pemburung]

Not sure if all the figures are right here. The October report from Comscore (which I haven't seen) quoted says "90 million visitors." Over what period? Crankydave assumed it was over a month, as it seemed from the original post. However, that would mean 1.08 billion unique visitors per year. One-sixth of the world's population. On-line on Google? Perhaps. But even if so, after less than 6 years at that rate(allowing for deaths) they would be relying on children less than 6 years old for new, unique visitors. Not noted as a major internet ad-clicking user group. Moreover, this calculation should have begun pretty much with Google's start. So, in theory, by now there are very few unique visitors available, if any. I'm not going to do the math, but available unique visitors is a series along the lines of (world's population of 6.5 billion - unique visitors month 1), (6.5 billion - unique visitors month 1 - unique visitors month 2), etc. If 90 million was the figure for one month after about 84 months, and assuming a reasonablly smooth curve that is probably logarithmic in nature, it would seem that most of the world has been used up already.

I doubt though that even the 90 million figure does represent unique people, as implied in Dave's calculation, in any case. For starters, I would think that a large percentage of visitors would access from both home and work/school, reducing the number of real pople, although these two locations would be seen as "unique visitors." On the other hand, a family of six using the same computer would be seen as one unique person, as would a library computer.

Most importatnly, and most in line with reality, is that is could easily be that everyone who uses
Google does so every month, the statistical period used by Comscore it seems. If this were the case, then Google's total user base would be 90 million (the truth probably lies somewhere in between 90M and 1080M). In this case, the crude figure, with no allowance for multiple use of the same address, or single users using multiple addresses, would be closer to $140 per year. So, we have a range of $16 to $140 per year per person.

So, Rumblepup, you may be worth more than you think.

[crankydave]

Not sure if all the figures are right here. The October report from Comscore (which I haven't seen) quoted says "90 million visitors." Over what period? Crankydave assumed it was over a month, as it seemed from the original post. However, that would mean 1.08 billion unique visitors per year. One-sixth of the world's population. On-line on Google? Perhaps. But even if so, after less than 6 years at that rate(allowing for deaths) they would be relying on children less than 6 years old for new, unique visitors. Not noted as a major internet ad-clicking user group. Moreover, this calculation should have begun pretty much with Google's start. So, in theory, by now there are very few unique visitors available, if any. I'm not going to do the math, but available unique visitors is a series along the lines of (world's population of 6.5 billion - unique visitors month 1), (6.5 billion - unique visitors month 1 - unique visitors month 2), etc. If 90 million was the figure for one month after about 84 months, and assuming a reasonablly smooth curve that is probably logarithmic in nature, it would seem that most of the world has been used up already.

I doubt though that even the 90 million figure does represent unique people, as implied in Dave's calculation, in any case. For starters, I would think that a large percentage of visitors would access from both home and work/school, reducing the number of real pople, although these two locations would be seen as "unique visitors." On the other hand, a family of six using the same computer would be seen as one unique person, as would a library computer.

Most importatnly, and most in line with reality, is that is could easily be that everyone who uses
Google does so every month, the statistical period used by Comscore it seems. If this were the case, then Google's total user base would be 90 million (the truth probably lies somewhere in between 90M and 1080M). In this case, the crude figure, with no allowance for multiple use of the same address, or single users using multiple addresses, would be closer to $140 per year. So, we have a range of $16 to $140 per year per person.

So, Rumblepup, you may be worth more than you think.

The 90 million represents a monthly figure for unique visitors.

The November numbers according to Comscore are...

87.849M unique visitors for Google.com
90.889M unique visitors for all Google sites

The January 2005 numbers according to Nielson//NetRankings are...

70.998M unique vistors for Google Search

These are unique visitors for the time frame stated as defined by Comsat and Nielson//NetRankings.

If you take the January figure, then the yearly figure would be $20.07 per unique vistor per year.

Again this figure repesents an average, is approximate, and based on figures collected from Niellson//NetRatings, Comsat, and Googles 10Q SEC filing.

pemburung... Your range is at best a wild guess.

Dave