As Google’s popularity grows, they rely less on advertising partners than ever. Here’s a case in point. CNNMoney.com reports that the advertising deal between Ask.com and Google is about to expire. Ask.com has Google’s sponsored links on its site but the contract will end at the beginning of next year. At first the company was confident they could renew the contract, but it hasn’t happened yet.
How things change. Google used to pay Ask.com and others to be their partner. Now Ask.com is doing the asking and Ask.com has more to gain than Google does on the deal. Here’s the data: in the second quarter, Google earned $997 million from ads on “partner sites.” Ask.com was responsible for about 10% of that, according to Barry Diller, CEO of IAC. That’s about $100 million. Google’s own sites brought in more than that—with $1.43 billion. Google shares in that revenue, maybe 80 to 85% of it. So the profit margins aren’t that thick—perhaps near 1%.
Perhaps the biggest reason to sign another deal with Ask.com is to prevent Microsoft from doing it. However, if Google will make them much better returns, as is likely, they will probably hold out for another contract. And it sounds like this time, they’ll have to give up more to get it.