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Google: Search and revenue

Last Updated: Wednesday, 28 November 2007

Karim Temsamani is the new general manager of Google Australia, and was the previous group director at Fairfax General Magazines and commercial director for newspapers.

Karim tells SmartCompany readers about the new direction for Google in Australia and the trends in online search that are key to the company’s fortunes.

To listen to the Lunch with Karim Temsamani, click here.

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Amanda Gome: What are the current trends in “search” by consumers?

Karim Temsamani: The online economy is buoyant. We’re seeing users – and large and small businesses – embracing search. This is driven by three perspectives.

The first one is the lowering of the cost of the tools of production. It’s a lot easier for any user and any business to put information online whether it’s a video or blog about their services or from a user perspective about what they do in life and what they want to share with their friends.

The second part is the adoption of broadband. Now about 60% of Australians have broadband and this number is increasing dramatically.

The third part is cheaper storage. And cheaper storage as well as faster computers are a really key part in terms of overall development from a web perspective. Every 13 months the ability to store information is doubling.

So you’re seeing more users and more businesses putting more information online.

And it’s more difficult finding exactly what you want and that’s where really Google comes into play and the search element is really critical.

Those trends have been around for a while, but what’s really exciting news?

You can’t under-estimate the element of acceleration. The trend is to make it more relevant, so local search is a very key part, and also making it broader so that you can find all sorts of information that you want online. So the universal search that Google has launched in Australia is a critical part of that as well.

You have set up Google in verticals. How many key verticals are out there and will they keep up their unique role?

We need to be set up from a business perspective to be able to answer the need of business customers and that’s why we have set up some of our teams along verticals. The verticals are basically the industry verticals that you would find in the market. We have a finance vertical, a travel vertical, a retail vertical and so on against most of the industries that are key and large in Australia.

We also have set up an agency team because a number of businesses small and large use agencies to gather expertise and we need to have very strong communication with these agencies to be able to communicate with them effectively. That way they can understand the benefits of search. We also have a very strong agency team and they are there to help all businesses learn more about online. We’re training them very extensively so that they can train some of their smaller business partners themselves.

Google has been very successful at generating a great revenue model through [paid] search, but the price of paid search is increasing faster than the rate of searches in total. How do you plan to add value to companies as the return on investment decreases?

The important thing to remember is that it’s not always based on return on investment, and the return on investment for these companies is increasing.

It is very clear from any company that is doing business with us where they are getting returns from, and where they’re getting the customers from. If something doesn’t work for them they would turn off their search with us and that’s clearly not what we’re seeing.

We’re being more successful with small and large businesses because they are able to pinpoint exactly what return on investment they’re getting from us.

I don’t agree that the cost of clicks is increasing faster than the search queries are increasing, but what is really important to remember is that the return on the investment is what is driving the business. And if our clients are doing well, we will be doing well.