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The Main Takeaway from Google's Earnings -- Google Continues to Take Substantial Market Share

The main takeaway from Google's earnings is Google continues to take substantial revenue market share -- it is becoming increasingly dominant in search advertising and search syndication despite the economic downturn.  While Google's growth has slowed, its market share gains don't appear to have slowed as much -- evidence of Google's many network effects.  

  • Google grew 6% overall, however when you break out the revenue mix one can see the network effects at work -- because there is a 12% differential within the Google model between direct Google site revenues, which grew 9%, and indirect Google Network revenues (from other website partners) which fell 3%.
  • We will have to wait and see what Yahoo, Microsoft, AOL, Ask/IAC and others report in the coming days, but unless there is a major surprise they all will have negative search advertising revenue growth or at best very slow revenue growth that is less than Google's 6%. 
    • When those data points come in we will be able to better confirm how much more market share Google has taken in the first quarter of this year. 

In short, the strongest gets stronger, at smaller players' expense.