Google has its eyes on ANZ advertising

Google's new ANZ boss emphasises 'level playing field' for small businesses

Karim Temsamani has taken the general manager's role at Google Australia and New Zealand at a time when the company is seemingly invincible. Its share price recently topped US$700 (NZ$917); the company leads the world in search technology, and it has almost too many plays in too many different sectors to enumerate.

Foremost, despite developing online word processors, email services, mobile phone software and an open set of programming standards for social networking sites such as MySpace and Bebo, Google is an advertising company.

Its rivers of gold flow from those tiny, text-based ads that appear when you visit its search engine or when you read your email in Gmail.

And its goal is to create advertising wherever people visit online — whether it's in video sites, like YouTube, which it purchased in October 2006 for US$1.65 billion, on Google Earth, or on the mobile devices that consumers are increasingly using to access internet content.

"We are now seeing 25% of consumers' media time spent online," Temsamani says. "And advertising is following that very strongly."

Temsamani joined Google in September. He was previously group director, Fairfax General Magazines, and commercial director for the newspapers. (Fairfax is the owner of The Australian Financial Review and Computerworld NZ).

"We want to continue to meet clients' needs and expectations and so we have set up teams with strong expertise in each of the key [advertising] verticals," he says. "We are focusing on products that meet end users' needs and advertisers' needs. It's our goal to create a level playing field in the online economy."

Temsamani says that's why Google is focused on making certain small businesses have access to the same online advertising tools as large organisations.

At a glance, it's hard to discern why Google is putting major resources into developing products such as online word processors, presentation programs and mobile-phone software.

The company has 30 engineers in Australia and is adding as many as it can find. Those engineers are responsible for developing Google Maps, and contribute to international efforts for the advertising products and productivity applications.

"Engineering is at the heart of everything we do," Temsamani says. He says the online word processors and productivity applications [there's a spreadsheet and presentation tool] were complementary applications to Microsoft's Office program.

"Office is useful if you want a desktop application," he says. "But if you want a collaborative application that you can access from anywhere on earth, then Google Apps comes to mind."

At the heart of these efforts is the desire to develop new forms of advertising, he says. Essentially, Google wants to hit you with advertising wherever you happen to be. And maintaining its core advantage in search is key to that.

Temsamani would not reveal Google Australia's operating numbers apart from saying that the company is exceeding expectations.

Its most recent Australian Securities and Investments Commission filing was made in 2004. That filing revealed that the company's local online advertising revenue was A$206 million, a figure that was estimated to have grown 108% year-on-year from the previous reporting period.

The equivalent New Zealand filing appears to only contain a fee paid to the local subsidiary for sales and marketing services and so throws no light on overall revenue achieved.

However, if Google has maintained the same Australian growth rate, its revenue from advertising sales would now top A$500 million.

Australian Financial Review

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