Google’s search and ad tools helped provide $80 billion of...
Google’s search and ad tools helped provide $80 billion of economic activity for 1.8 million U.S. advertisers, website publishers and nonprofits, said the company’s 2011 economic impact report (http://xrl.us/bndn9v). The report provides a state-by-state breakdown of the company’s economic impact…
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on businesses and consumers. One example is King Arthur Flour, a New England baking company that dates back to George Washington’s presidency, but which recently used the Web to grow into an internationally-renowned baking business, said Margo Georgiadis, Google vice president of Americas sales, in a blog post (http://xrl.us/bndoad). Ninety-seven percent of Americans are going online to find local goods and services using their computers and mobile devices, she said. “The growth of our Internet use has naturally helped the ecommerce industry to expand rapidly over the past decade,” Georgiadis said. “But the web is also positively impacting brick-and-mortar businesses.” The Boston Consulting Group found that American consumers who researched products online last year spent about $2,000 each purchasing those products offline, she said. “That’s almost $500 billion that went directly to main street retail.” Google officials have been traveling the country over the past year “with our Get Your Business Online program, encouraging businesses throughout the U.S. to create free websites and reach more customers,” Georgiadis said. The Web has both positively and negatively impacted brick-and-mortar retailers, said Eric Goldman, director of the High Tech Law Institute at Santa Clara University School of Law. He wasn’t involved in Google’s report, and reviewed it at our request. On the plus side, the Internet helps offline retailers advertise more effectively and has made consumers more aware of products they may want to buy, he said. On the negative side, offline retailers are struggling with “showrooming,” where consumers use offline retailers to discover and compare products, but then transact online with a cheaper online-only retailer. Even if it’s true that offline retailers generate half-a-trillion dollars from product purchases that were aided by online searches, “only a small fraction of that can be attributed to new incremental sales that occurred solely because of the consumers’ online research,” he said. “It doesn’t reflect the offsetting lost revenue from showrooming and other ways that online retailers have pulled in revenue that used to go to offline retailers.”