Google ad revenue getting even more profitable?

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In Paul’s article this morning about another Google anti-trust violation in the EU, he notes Bloomberg reports saying that AdSense is becoming less and less relevant. It’s interesting that AdSense (where Google pays websites to host ads) is continuing to shrink while AdWords or Google Ads (where advertisers pay Google for search and display ads) continues to see big growth (I assume it is since Google’s overall ad revenue is growing).

So that means while Google is collecting more revenue from advertisers they are paying less revenue to sites that actually host ads. Presumably this reflects more and more ad dollars moving into search, and also puts into sharp relief competitors’ criticisms about Google essentially scraping content to serve up information directly to consumers (and bypass sites themselves).

For people deep into online advertising this is probably obvious stuff– and even I understood the relative difference in cost/value of search vs. display ads– but I hadn’t ever bothered to look at this distinction between AdSense and AdWords in the way this article has prompted me to. Of course, I could be misinterpreting the whole thing and perhaps there are other dimensions I’m ignorant of. If so, I’d be interested in hearing what others have to think.

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