How Valuable Are 46,000 Adsense Accounts -- and to Whom?

by Chris Castle

Google acknowledges in its recent "How Google Fights Piracy" report that it has voluntarily terminated a significant number of Adsense publisher accounts (at p. 24):

In 2012, Google disabled ad serving to 46,000 sites for violating our policies prohibiting the placement of ads on sites with infringing content, the vast majority being violations Google detected before we were notified.

What Google does not say is how long were these "sites" operational, how much money Google made from selling advertising on these sites, and what Google is going to do with the money that it made before the accounts were terminated. Google always says that we should follow the money on brand sponsored piracy -- so let's.

If we assume that Google made a modest average of $10,000 on each of these terminated accounts -- a very conservative estimate -- then the 46,000 accounts that Google terminated brought $460,000,000 to Google.

Bear in mind that Google paid a $500,000,000 fine to the State of Rhode Island and the U.S. Government in a settlement for promoting the sale of drugs in violation of the Controlled Substances Act--after producing over 4,000,000 documents and an extensive grand jury investigation.

So if Google made $460,000,000 from the accounts that it terminated and if Google retains approximately 40% of the gross revenues from ad sales, then the total amount generated-just by these terminated accounts-was $1,150,000,000.

Imagine what songwriters and artists might have made just from a forfeiture of $1,150,000,000?

If these assumptions are even remotely in the ballpark, we are talking over a billion dollars extracted from brands and split between Google and pirates in a world where all sales are monetized. (And if these assumptions are incorrect, I look forward to that demonstration from Google's disclosure of exactly how much money they made, who they paid it to and how much they kept for themselves-because they kept something. Google's demonstrated practice is to shut off the account, keep the money and promise not to do it again.)

While the price of advertising on the illegal sites is lower than the advertising on legitimate sites (according to a Spotify report), it is important to note that from Google's perspective, Google's gross margins on the advertising sold may actually be roughly the same on either one, if not higher on the illegal sites because of the subterfuge necessary to mask the transactions that drives down the value of the revenue share to the pirates.

Google established the precedent in its prosecution for promoting illegal drug sales of paying the relevant state and federal government agencies a compensatory number reflecting the gross sums made by both the offending advertiser and by Google itself. And remember -- in these kinds of drug cases, people often die.

In the case of terminated Adsense accounts, what should happen to the money that Google made -- mistakenly or intentionally. The standard that Google wants to impose on the world is that when you profit from crime, you can keep your money if you promise not to do it again.

That never has been the law, is not the law now, and is highly unlikely to be the law in the future.

SOURCE:  huffingtonpost.com