New York Times Google guy Miguel Helft has a fascinating piece on the Google team that constantly monitors the number of searches, ads that user click through, and the dollars that flow into Google's coffers. Every hour of every day, this team assembles the data and compares it with a week earlier, obsessively looking for times when searches or ad clicks dropped and trying to figure out why. In addition, they're constantly searching for ways to improve the system, whether it's by matching ads with search terms better or even evaluating the quality of the ad that pops up when users hit the links. For example, ads that only link to more ads but don't immediately offer something of value to the customer are penalized, and the advertiser will be assessed a higher fee. Eventually, the team will even score advertisers on how long it takes for their pages to load.
This constant effort to weigh ad revenue with the experience and convenience of the server, to even force advertisers to improve their own web pages, has netted the company a revenue stream that clocks in at $2 million an hour; as Search Engine Land's Greg Sterling put it, "This is how Google can show fewer ads and make still more money." But institutional investors, who are still denied access to precisely how the team evaluates each search and ad, are a little skittish.