Adsense payout flat for partners

We’ve heard Adsense publishers complaining for awhile about diminishing returns, and I’m seeing some proof of that in their most recent earnings report. Let’s take a look at the pertinent numbers:

TAC — Traffic Acquisition Costs, the portion of revenues shared with Google’s partners, increased to $785 million in the second quarter. This compares to TAC of $723 million in the first quarter. TAC as a percentage of advertising revenues remained flat at 32% from the first quarter to the second quarter.

That’s the total amount of revenue shared with Google’s “partners”, which I guess we are as Adsense publishers. This is the total pie, from the standpoint of all publisher, including premium ones, who likely get the lion’s share of the earnings.

Google Network Revenues — Google’s partner sites generated revenues, through AdSense programs, of $997 million, or 41% of total revenues. This is a 58% increase over network revenues of $630 million generated in the second quarter of 2005 and a 7% increase over first quarter 2006 revenues of $928 million.

The partners are accounting for a much larger percentage of the revenues this year, up 58%. So, the Partners contributed 58% more money, but the payout remained relatively flat at 32%.

I’ll admit I’ve done a superficial analysis of this, but unless I’m reading something wrong, Google kept more of the money that was take in. That has been my hunch all the time.

A big flag is that the total revenues are only up 9% for the Partners since the first quarter of this year. Seasonality is part of it, but I sense the whole program is starting to deflate a bit, or at least pull back to lower levels. This just means we all get to work a bit harder to stay even.