Google News Worth $100 Million Says VP Marissa Mayer

Posted on July 24, 2008

Fortune reports that Google's Vice President Marissa Mayer recently put the value of Google News at $100 million.
That's the figure Google (GOOG) vice president Marissa Mayer, who heads search products and user experience, threw out during a Tuesday lunch session at Fortune’s Brainstorm Tech conference in Half Moon Bay, Calif. How does she put a value on a product that doesn't directly make money? The online giant figures that Google News funnels readers over to the main Google search engine, where they do searches that do produce ads. And that's a nice business. Think of Google News as a $100 million search referral machine.

Mayer's observation about Google News sheds some light on the company's broader strategy for driving traffic to its search engine – a strategy that has helped the company build a dominant market share lead over rivals Yahoo (YHOO) and Microsoft (MSFT). It's not all about the search engine itself. Google is happy to build popular products that don’t make any money on their own but tie users into a broader Google ecosystem. It's like Vegas casinos that offer cheap buffets to get people into the building, knowing a lot of them will end up playing slots.
Google News is arguably the heaviest used news search on the Internet and it drives a ton of traffic to news websites and news services. Google recently recaptured some of that traffic for themselves when they licensed AP news stories and placed them on the Google.com domain. Google likely has even more ideas for recapturing Google News traffic but it sounds like it also works well for them simply by attracting people to other Google services.