What's Google Worth?

What's Google's total economic value to publishers, advertisers, and consumers? Just shy of $120 billion, says the search giant. In order to estimate Google's value to publishers and advertisers ($54 billion), Google's Chief Economist Hal Varian multiplied the value of a click on Google by total clicks, and then subtracted that number by the cost of a click times total clicks.

To calculate the value of Google to users, Varian cited the "A Day Without A Search Engine" study, which plotted the time spent by students searching for the answers to questions in a library against that spent by those who used Google to get their information, reports TechCrunch. "Students who searched in the library ended up averaging 22 minutes to find what they needed, whereas students using Google took an average of 7 minutes, saving 15 minutes," it writes.

Varian came to the conclusion that Google saves us 3.75 minutes per day, and then used the average U.S. hourly earnings numbers ($22) to calculate that Google saves users $1.37 a day. That number multiplied by 365 days in a year equals $500. Varian then multiplied that $500 number by 130 million, the number of people employed in the US, to get to $65 billion value in savings for users.

Read the whole story at Tech Crunch »
Tags: google, search
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