This is one of the flimsiest things I've ever seen in my life.
Turns out the number is entirely based on a quote in 2006 from Fortune editor Jon Fortt:
“The online giant figures that Google News funnels readers over to the main Google search engine, where they do searches that do produce ads. And that’s a nice business. Think of Google News as a $100 million search referral machine” [1]
He claims he got the number from Marissa Meyer at a tech conference lunch session, but without quoting her directly, and there's zero detail about whether it is supposed to represent revenue or a long-term valuation of the business.
Then the "study" says $100M was 0.7% of Google's revenue in 2006, and assumes it's still proportionally the same, which makes it $4.7B. [2]
Which is completely ridiculous. Google is a vastly larger and more diversified company now, but more importantly hardly needs News to drive users to Search. (Back in 2006 when Yahoo was still a major competitor maybe it did drive meaningful traffic to Search that wouldn't have occurred otherwise, but that's very hard to argue today.)
Jeff Jarvis: "Utter bullshit. Snippets in search are NOT content. Jeesh. They are links TO the publishers. Google does not monetize Google News. When it makes money on news it's by serving ads ON publishers' sites."
Somewhat related, I really wish HN had a "bullshit" tagging option. In my mind there is so much copious bullshit flying around these days, and that the concept is different enough from just "flag" or a downvote, that it deserves it's own callout.
That's not quite a correct summary of their methodology.
They're indeed starting from that $100M/year, and scaling it up directly by revenue growth. But Google's revenue didn't grow by 47x in that time. So the number they end up attributing to Google News is $700M/year, which is still pretty ludicrous for a site with no ads nor other kind of monetization.
Where does the missing $4G come from? Well, they assume that Google Search does 6x the news traffic of Google News, and then apply that 6x factor to the fabricated $700M number too.
Turns out the number is entirely based on a quote in 2006 from Fortune editor Jon Fortt:
“The online giant figures that Google News funnels readers over to the main Google search engine, where they do searches that do produce ads. And that’s a nice business. Think of Google News as a $100 million search referral machine” [1]
He claims he got the number from Marissa Meyer at a tech conference lunch session, but without quoting her directly, and there's zero detail about whether it is supposed to represent revenue or a long-term valuation of the business.
Then the "study" says $100M was 0.7% of Google's revenue in 2006, and assumes it's still proportionally the same, which makes it $4.7B. [2]
Which is completely ridiculous. Google is a vastly larger and more diversified company now, but more importantly hardly needs News to drive users to Search. (Back in 2006 when Yahoo was still a major competitor maybe it did drive meaningful traffic to Search that wouldn't have occurred otherwise, but that's very hard to argue today.)
[1] http://fortune.com/2008/07/22/whats-google-news-worth-100-mi...
[2] pg. 23 of http://www.newsmediaalliance.org/wp-content/uploads/2019/06/...