Google Cries Poor, Loses Money in Oz!
GOOGLE claims to be operating at a loss in Australia despite having 90% market share.
The reason, according to the Sydney Morning Herald, is that Google's Australian earnings are sent to Ireland where it is taxed at 12.5% before a service fee is reptriated back.
Anomaly 1: Google says it grossed just $A90m in Australia last year. Yet it has more than 90% share of the paid search market, which is estimated by leading industry figures to be worth $A870m in 2008. Do the math.
Anomaly 2: Google reported a loss of $A6.2m in Australia for 2008. It also lost money in 2007. Meanwhile the search market is going ballistic and everyone’s complaining about search inflation. Huh?
Anomaly 3: Google paid Australian tax to the Australian Government of $A3.9m in 2008 – less than some of its Australian clients would pay them each year for search advertising, and also less than its “travel and entertainment” bill of $A4.6m.
The industry reckons Google will take more than $1 billion from Aussie advertisers this year.
Wonder what Google will report?
Meanwhile, the company refused to comment on the discrapancies.
See full story in Sydney Morning Herald.
Search Engine Room: May 25, 2009
