Google sees jump in paid search, display

Google is apparently cleaning up on paid search and display advertising, with profit up 32 percent in the third quarter for a staggering $2.17 billion. That’s profit, not revenue, according to Online Media Daily.

They are making money on what should be $2.5 billion worth of display ads and $1 billion in mobile on an annual basis – including about 90,000 Android apps – and by monetizing more than 2 billion YouTube views per week.

Online Media Daily says search ads remain the company’s primary revenue driver, from desktop to mobile,” topping display ads, though apparently specific figures for search were not released.

Advertisers are paying more for paid-search advertising, and clicks on ads posted to Google’s site and the sites of AdSense partners are up 16 percent year-over-year and 2 percent from the second quarter (see our AdSense ads below each post here¬† and on our Carolina Outdoors Guide and its This Land, Your Land blog, and our Carolina Music Festivals site).

The AdSense program pays its partner sites a small portion of advertisers’ fees when readers click on an ad that appears on the partner’s site – pennies per click, usually. But that money, called Traffic Acquisition Costs,¬† adds up, and payments increased to $1.81 billion in the third quarter of 2010, compared with $1.56 billion in the third quarter of 2009.

Online Media Daily also reports that “Google has agreed to pay $3.5 million to settle a class-action lawsuit alleging that it used a misleading registration form that tricked marketers into paying for ads that ran on its publisher network.

“The proposed settlement affects marketers that advertised on Google between October of 2007 and July of 2009 and didn’t realize that they would be opted-in to Google’s AdSense network by default.”

$3.5 million out of a quarterly profit of $2.7 billion. Yeah, that’ll hurt.

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