Google’s practice of channeling its revenues through Ireland is getting the company into trouble yet again.  This time, onlookers in Australia have taken note, and although no government officials have become involved, people are definitely unhappy that Google may be shirking its tax obligations.

Here’s the thing: Ireland offers a lower corporate tax rate than most other places in the world.  So Google set up its EU headquarters in Ireland, and can save money by letting Ireland tax all sorts of revenue, regardless of its point of origin.

This approach necessarily deprives other countries of funds, though.  Accountants and politicians in the UK have calculated that Google avoided paying their government $160 million in 2007 and $725 million in 2008, in fact.

And now folks in Australia are performing similar calculations.  Julian Lee observed today, "Despite its near total dominance of the search advertising market, Google does not make one red cent through advertising, according to its latest set of accounts.  Instead Google Australia, which analysts estimates makes about $700 million a year from Australian advertisers, is a mere ‘service provider’ that makes about a sixth of that collecting fees from its head office and a subsidiary in Ireland."

As a result, Google only paid $714,457 in taxes in Australia last year, and Australians might well like to see a bigger piece of the pie.

Google has launched a new feature for its Conversion Optimizer tool for AdWords. It’s called Target CPA Bidding, and lets advertisers set a bid that reflects the average amount they’d like to pay for a conversion, as opposed to the maximum they’re willing to pay for it.

"We launched Conversion Optimizer in 2007 as a tool to improve your campaign ROI," says Emily Williams of Google’s InsideAdWords crew. "Conversion Optimizer analyzes your conversion tracking data and automatically adjusts your bids for each auction. Over the past few years, we’ve been pleased to hear from a number of you that you’ve seen significant ROI improvements after implementing Conversion Optimizer. In fact, analysis indicates that, on average, those of you who use the tool experience a 21% increase in conversions along with a 14% decrease in CPA."

That analysis is based on Conversion Optimizer campaign performance over a year’s time, with a control set of campaigns.

"This latest update to Conversion Optimizer was made in response to your feedback," says Williams. "We’ve heard from many of you that you’re more accustomed to thinking in terms of a target or average CPA when it comes to managing your online advertising (as opposed to the Max CPA bids which the tool has historically required). We hope that having the additional Target CPA bidding option will make it even easier for you to boost your AdWords ROI."

To use the new Target CPA bidding feature, advertisers can go to the settings tab in their account, and go to "Focus on Conversions". From there, just click Advanced Options. Conversion Optimizer itself is only available for campaigns using conversion tracking, and have received at least 15 conversions over the last 30 days.

United States lawmakers have spent a year preparing draft legislation for a law that would define and limit privacy for advertisers and Internet companies. The legislation will govern methods of taking information from users online and using that information to target advertisements to them. On Tuesday, they will present the draft legislation.

The timing is good for such an announcement given the worry over, among other things, Facebook’s recent changes that have caused fresh worry over privacy.

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According to the Wall Street Journal, two of the representatives working on the bill, Rick Boucher (D-VA) and Cliff Stearns (R-FL) are posting the bill on their websites Tuesday. The plan is to accept feedback from readers for two months, then revise and submit it.

Elements of the draft include the following.

• Disclosure of what information is collected and how, how it is used and who it is shared with
• Opt-outs for consumers.
• Restrictions on collecting financial, medical, government ID information and that of children

Internet and advertising companies, meanwhile, argue that any such bill risks damaging the $23 billion online advertising market.

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Although Google still hasn’t shared many details concerning how much money YouTube is or isn’t raking in, there’s good reason to believe the site’s doing just fine.  A relatively high-ranking Googler indicated in an interview that the number of entities using display ads is up by about 1,000 percent on a year-over-year basis.

This notion comes from Barry Salzman, Head of Media and Platforms, Americas at Google, and there’s not much room for misinterpretation.  Salzman spoke to Brian Womack, and Womack was able to report afterward that Google "boosted the number of advertisers using display ads on its YouTube video site 10-fold in the past year."

That’s a pretty impressive growth rate.  Indeed, it sounds possible that YouTube’s attracted more advertisers than it can handle (at least without plastering ads all over the place), which would mean that Google may be able to charge whatever it likes for display ads.

That state of affairs would obviously be beneficial for Google and its investors.  Plus, if Google’s turning away companies, it would help ensure that YouTube users are only exposed to the most relevant, interesting ads.

So perhaps YouTube’s struck a good balance between making money and not annoying users.  We’ll be sure to inspect Google’s next earnings report for more evidence on this front.

Google announced today that AdWords for Mobile is now fully available, after being revealed a few weeks ago.

"AdWords for mobile gives you a quick overview of how your account is performing and allows you to easily make select changes to your keywords and campaigns," explains Miles Johnson of Google’s Inside AdWords crew.

The following video shows how it works:

It also lets you keep track of key account developments by showing you the alerts and filters you’ve set up for the keywords and campaigns. "If you discover a problem that needs immediate attention, you can adjust keyword bids, change campaign budgets, and enable, pause, or delete campaigns and keywords –all directly from your phone," says Google.

Google considers AdWords for Mobile one of its "Ad Innovations." This is a site the company set up for advertisers to see the newer things it is doing with regards to online advertising. Other projects featured here include: remarketing, search funnels, click to call phone extensions, ad extensions, new ad models, YouTube video targeting, YouTube Insights, and others.

A lawsuit filed by language software firm Rosetta Stone against Google for copyright infringement has been dismissed by a federal judge.

In its lawsuit, filed in July 2009, Rosetta Stone alleged that Google allowed third parties including individuals involved in software piracy to purchase the right to use Rosetta Stone trademarks or other terms confusingly similar in Google’s Adwords advertising program.

Google said the ruling was "consistent with a growing line of decisions" about the Internet.

"Users searching on Google benefit from being able to choose from a variety of competing advertisers, and we’ve found no evidence that legitimate use of trademarks as keyword triggers or in the text of advertisements confuses consumers. We’re pleased that the judge has ruled in Google’s favor, consistent with a growing line of decisions in the Internet space," Google said in a statement.

Rosetta Stone expressed its disappointment about the ruling, charging that Google does not do enough to stop such practices on its AdWords platform.

"We are deeply disappointed that Rosetta Stone was not given an opportunity to present at a public trial the facts underlying Google’s practices and the motivation that led Google to adopt its current trademark policies," stated Tom Adams, President and CEO of Rosetta Stone Inc.

"Google has a corporate responsibility to protect consumers and promote trust in its search results. Without question, Google knows that counterfeit software is being advertised in its Adwords program and takes no effective steps to stop this illicit activity."

Rosetta Stone said it plans to review the decision and will consider an appeal to the U.S. Court of Appeals.
 

ad network AdMob has released its March report. Surprisingly, perhaps, the report notes that advertising traffic on the Android phone has surpassed that on the iPhone.

Android ad traffic in the U.S. was 46% in March of this year versus iPhone’s 32%.

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Android’s ad traffic has grown 32% per month, rising from 72 million requests in March of last year to two billion last month. Last March 12 manufacturers were responsible for 34 Android devices though only two, the HTC Dream and HTC Magic comprised 96% of total traffic. This year, that 96% was shared between 11 devices. The Motorola Druid has the most traffic, at 32%.

Although the fact that advertisers in the U.S. have elected to put more ads on Android than iPhone is a good indicator as to the desirability of that platform, Apple is still ahead of Google overall. Second quarter reports from Apple indicated that the company had sold 8.75 million iPhones in that three-month period. Android sold seven million in the whole of last year.

Top photo by Gene Wolf

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Google is retiring the Google Advertising Professionals (GAP) program, and replacing it with the new Google AdWords Certification program.

"We’ve had a lot of great feedback from agencies and today we’re announcing changes designed to offer them better training and more rigorous certification in AdWords proficiency, and to lower costs for those who help advertisers get the most out of AdWords," says Penry Price, Vice President, Global Agency Development at Google. "We’re also making it easier for advertisers to find certified agency partners to work with them on digital advertising."

Features of the new training program include:

- New training materials to help agencies better understand recent changes in search marketing and AdWords functionality, available via webinar series, learning center, or on-site training at Google

- A redesigned Certified Partner badge, which includes a “Click to Verify” element so advertisers can view the partner’s profile page for additional information.

Google has also launched Google Partner Search, which a directory that pairs advertisers with Certified Partners, as well as new AdWords API pricing.

Today Google announced new preferred AdWords API pricing.  Qualified AdWords Certified Partners who manage client AdWords accounts get free use of the API based on managed client spend.

"The Google AdWords API allows developers to build applications that interact directly with the AdWords platform," explains Penry Price, Vice President, Global Agency Development at Google. "Agencies and developers of search engine marketing tools use these applications to manage large AdWords campaigns more efficiently and creatively."

Agencies must have an active agency profile page to apply for preferred API pricing. To qualify, they must meet the following criteria:

• Your company is a Google AdWords Certified Partner.
• You use the AdWords API to manage your customers’ AdWords campaigns (e.g. you are an agency or develop search engine marketing tools).
• Your AdWords API-based tools remain in compliance with the AdWords API terms and conditions, including the required minimum functionality.

"We hope preferred AdWords API pricing will encourage agencies and developers to experiment with new strategies, expand the functionality of their tools, and build more comprehensive client campaigns without worrying about increased costs," says Price.

Google will begin accepting applications on May 26.

Google also dropped its Google Advertising Professionals (GAP) program, and replaced it with the new Google AdWords Certification program, while launching a directory for agencies and advertisers to connect. This is called Google Partner Search.

Facebook is infiltrating sites all over the web. These sites are happy to add Facebook’s social plug-ins. What if Facebook launched an AdSense-like product – a product that lets publishers stick relevant ads from Facebook on their sites for a cut of the money? They would be HIGHLY, HIGHLY targeted because the more sites that use plugins like Facebook’s like button, the more users will share their likes with Facebook, which goes to the profile, which is where Facebook already draws its information from to serve its own ads today.

Should Google be worried? Share your thoughts.

These ads are already pretty well targeted, when the user has enough information in their profile. Social plugins like the like button will only facilitate the population of such information in the profile.

Apparently Mashable founder Pete Cashmore has a similar view on this, as he says in an article for CNN, "Google makes the vast majority of its money from ads — these ads typically match your search terms, or the content of the Web page you’re viewing. Google has certainly worked to personalize these ads, but its knowledge of your friends and interests is more limited than Facebook’s. The data gleaned from thousands of Facebook Like buttons around the web could make for an ad network that rivals Google’s AdSense."

Ian Schafer at AdAge has also contemplated such a scenario. "It seems to be an inevitability that all of this intelligence will one day be applied to power a socially targeted ad network as big (or bigger than) Google’s AdSense," he says. "It would be a network that would theoretically deliver even better results for advertisers, resulting in higher CPMs/CPCs/CP-whatevers that can deliver higher payouts to publishers, making a choice between the two platforms a not-too-difficult one for those publishers."

The Like button is a game changer because all of a sudden you have the whole world wide web of content to "like" not just what’s within your immediate network within Facebook and what you may have taken the time to add to your profile two years ago. It keeps user interests current and enables an infinite amount of interest indication that advertisers would salivate for.

If Facebook were to launch an AdSense-like product, that doesn’t necessarily mean Google would completely lose out. I can certainly see a lot of sites going forward with both. When pressed to make a choice between the two, however, it could make things interesting for the industry at large.

Would you serve AdSense ads or Facebook ads on your site if such a scenario were to come to fruition? Let us know.

AdWords users who feel an urge to target iPad owners can now do so without reaching out to people carrying Android devices and iPhones, as well.  Google’s added an option to its "networks and devices" screen that’ll allow advertisers to adopt a narrow focus.

A post on the Inside AdWords blog announced late yesterday, "[W]e feel confident adding the iPad to the list of mobile devices that you can target specifically.  To do this, simply edit the ‘Devices’ section in your Campaign Settings, and select the iPad under ‘Advanced device and carrier options.’"

The post later continued, "Also, remember that you can promote your iPhone/iPad or Android apps directly by linking to the download URL in your ads.  This way people can download your app straight from your ads.  To make things easier, we’ll handle the device targeting automatically when these ads show on mobile devices."

These developments show that Google is continuing to view the iPad as a very significant device, and considers the mobile market one of its top priorities.

Perhaps the more interesting matter will be whether AdWords users share the same outlook (iPad owners will tend to be early adopters with a fair amount of disposable income, after all), or if Google’s efforts in this area will go unappreciated.

A couple of months ago, we asked whether MySpace could make a comeback. Since that time, they’ve become #1 on Android and jumped into bulk user data sales.

Today, MySpace has unveiled a new events plaform.

Called MySpace Events, it presumes to be “a global events and calendar platform providing users with new tools to create, discover, share, and manage events across MySpace and multiple social networks.”

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Key features include the following.

• A new social and pop culture calendar that “combines your friends’ events, your events, events from your favorite artists, with pop culture events and sponsored events.”
• Ability to buy concert tickets directly from an artist’s profile.
• “Social advertising,” wherein advertisers can purchase ad space inside users’ social calendars.
• Cross-plaform event viewing in which a user’s MySpace calendar includes Facebook events. “We’re providing features to share events on MySpace via the Stream and across the web including on Facebook, Twitter, and tiny url.”

The announcement focuses on the benefits to both the Myspace users and the individual, up-and-coming “artists” who have used the service to promote themselves. It will be interesting to see how bigger companies use the platform.

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Local business review site Yelp held a press phone call this morning to discuss major changes it’s making to its site and business. Faced with class action lawsuits by business owners alleging they’ve been extorted by Yelp, the service has decided to make filtered-out reviews publicly visible and has removed the option for advertisers to push their favorite review to the top of their business’s page.

Did Yelp just cry Uncle? Is this the beginning of the end for its most important revenue stream, as some have argued? Here’s what we found most interesting about the call today.

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Yelp Gets Hit Hard With Questionable Reviews

Surprise, surprise – there are a lot of people out there who appear to be trying to game Yelp. This morning the company added a link at the bottom of each business’s page to “filtered reviews.” Those are the ones that the Yelp algorithm determined weren’t trustworthy enough to display on the site. They used to just disappear into a mysterious black hole, something many people found suspicious. Now you can look at them, and most of the time you can see why the reviews were yanked. There are a lot of them, too.

CEO Jeremy Stoppelman said he hoped exposing these buried reviews would put to rest the “myth” that the company buries positive reviews if companies don’t buy advertising and will give site users a chance to see the “unique challenge we face.”

Did Yelp Just Kill The Golden Goose?

Some critics have alleged that the ability to put favorite reviews on top of the page was the most compelling thing Yelp had to offer advertisers. The new video slideshows aren’t nearly as compelling as highlighting the good news and pushing down the bad news, they say.

Stoppelman offered a relatively convincing response to that when we asked him about it. He said that search placement is actually the biggest thing advertisers are paying for. “Favorite reviews” have limited draw, he said, because the site’s natural Yelp Sort algorithm already displays reviews with a businesses’s average rating or better at the top of the page automatically. He also said that round tables of business owners across multiple cities identified video advertising as the best possible substitute for the feature. Consider me convinced.

Complainers Are Just Complaining

Are businesses that complain about Yelp just upset that Stoppelman has built such a compelling site they feel obligated to advertise there, we asked? The Yelp CEO said in response that many small businesses are used to advertising in the newspaper and on radio and that the traditional local advertising market has been disrupted by Yelp. “Yelp represents a shift in the local business landscape,” Stoppelman said. “When those shifts happen, you’ll see some people lose out and then they’ll register their complaints.”

Do Yelp sales people pressure local business owners into advertising on the site? Do they wield the relative placement of positive and negative reviews like a weapon? It’s hard to know what goes on in those conversations, but there are certainly countless business owners who are accustomed to paying for pure positivity in the form of traditional advertising and for whom the presence or risk of negative feedback on a site like Yelp is alarming to the core. As Craigslist founder Craig Newmark said in a blog post today, “By the end of this decade, power and influence will shift largely to those people with the best reputations and trust networks, from people with money and nominal power.” That’s where Yelp operates and it represents a change in the world.

Yelp’s changes today seem like wise ones to me. This kind of transparency is likely to be helpful as the world of local business becomes more complicated thanks to the internet.

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Today Google introduced two new elements to its popular advertising system, a Search Funnel and something it is calling Ad Innovations.

The company’s VP of product management, Susan Wojcicki, described the Search Funnel as a “set of reports describing the Google.com search ad click and impression behavior leading up to a conversion.”

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The idea is that users of the Sales Funnel will, over time, tighten and focus their use of Google Ads to such a degree that they will be able to sell a grommet to an Albanian from outer space.

“The data you see in Search Funnels can help you understand how users search for your products before converting so that you can optimize these conversion paths.”

Ad Innovations is a specialist website Google has set up to “work closely with advertisers on what comes next.” They intend to use the space to debut ad-tech ideas and solicit user feedback.

Photo by Danny Sullivan.

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