Google Instant is Improving Ad Revenues, but was that the Motivation?

Posted 11/06/2010 at 9:29am | by Justin Kerr

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Google Instant is arguably one of the biggest changes to the search engine landscape since Google went mainstream back in 1998, but analysts are starting to question if it was really to enhance the user experience, or if it was simply a cash grab. Search management platform provider Marin Software who is responsible for over $1.3 billion in online advertising investments has just released their updated stats, and it appears as though Google might just be on to something here. Marin claims paid ad impressions have risen by 9 percent, and the actual click through rate has increase by more than 5 percent. These stats translate into what is estimated to be a 2 percent increase in overall revenues for Google, through even this is open to debate.

Google is a public company, so the motivation to increase profits is a foregone conclusion, however Google denies instant search was a profit driven decision. A Google spokesperson told eWEEK they wouldn’t comment on “individual firms or campaigns”, however they did have a few choice words for the so-called “analysts”.  "We launched Instant because it's so much better for the user. In fact, from a revenue standpoint, its impact has been very minimal; and from a resource standpoint, it's actually pretty expensive. So why did we do it? Well, we believe from a user standpoint, Instant is outstanding and the data that we are seeing actually bears this out."

So now that you’ve seen both sides of the coin do you think Google Instant was a revenue play, user driven, or a bit of both?