That $100 Float From Google’s AdSense Program is Starting to Add Up

By Alice Hill
RealTechNews

Bloggers and even large content sites rely on Google’s AdSense program to generate revenue. (We do here at RTN.) In some cases, Google’s ads are the only way for a small blogger to even see a nickel, but unfortunately there’s an interesting elephant sitting in the middle of the room: the $100 minimum you must earn before Google cuts you a check. In the banking world, that’s called a “float” and in banking terms, a $100 minimum earnings float is HUGE.

Consider the following:

–Most of the millions and millions of blogs out there never get to the $100 mark so the float stays in Google’s bank account as the blogs struggle to hit $100 and then move back down to zero for another cycle toward $100, or just never get past $75 - $80.

–Google earn about 3.5% of its revenue from this practice - or roughly $267 million in the first quarter of this year. True, it is not a huge amount in Google’s world, but as the number of blogs grow (and thus compete more and more for clicks and attention) the more small under $100 accounts are piling up. $267 million a quarter if it remains unchanged is $1.068 billion in one year for basically doing nothing, and the number as we can see is only getting larger.

How Much is Piling Up?

According to IT Week’s Lem Bingley:
The figures (accrued revenue share on the balance sheet, in millions of dollars) are as follows:

Q4 03: 88.7 (then a gap as Google went public)
Q3 04: 101.9
Q4 04: 122.5
Q1 05: 154.6
Q2 05: 153.6
Q3 05: 174.7
Q4 05: 215.7
Q1 06: 267.2

We Say: That’s what I called compounded interest. With Microsoft getting into the keyword ad fray - look for competitor to offer electronic transfers involving less money and hopefully less float for the small guy to bear.