IAC reported first quarter earnings this morning, and broke out the financials of what the new IAC would like after the pending five-way breakup of the company is completed. (A March court victory against dissenting shareholder Liberty Media clears the way for the spin offs). What’s clear from the financial statements is that the new IAC very much owes its 22 percent jump in revenues and 15 percent jump in operating income to the $3.5 billion, five-year deal it struck with Google last fall to hand over all search advertising on Ask.com and other sites to the search overlord.

In the Media & Advertising division—the new IAC’ largest and most profitable unit which includes Ask.com, Citysearch, and Evite—revenues increased 28 percent to $216 million and operating income skyrocketed 192 percent to $31 million. This was largely due to better revenues per search query due to the Google relationship, and a slashing of marketing costs. (Those annoying and expensive TV commercials finally got canned). Ask has been able to hang on to iits No. 5 spot in search market share (4.7 percent in March, according to comScore) and showed the biggest percentage gain (12 percent) in search queries of any search engine

These numbers show the benefits, at least in the short term, of handing your search advertising over to Google—something Yahoo is learning itself through its limited test with Google to do the same thing. The question is what happens in the long term when market share erodes and Google does not have to pay so much for the privilege of taking away the search advertising business from its fading competitors.

IAC’s other businesses did not do so well on their own. Match.com saw a 10 percent jump in revenues, but a 13 percent decline in operating profits. And the other businesses are just a mish-mash of underperforming assets.

Roughly one week ago Google introduced mobile image ads within the AdWords network. Today DoubleClick, Google’s most ambitious acquisition of late, of which it was officially granted tutelage not too long ago after passing through numerous regulatory hurdles, is putting its own heft behind Mountain View’s mobile ad systems. It is doing so by integrating with Google’s AdSense for Mobile, as well as other established independents in the market, including AdMob, the self-professed “largest mobile advertising network,” and one which our own Kristen Nicole featured in a piece earlier today, and MBrand, a network run by Millennial Media. Millennial’s Decktrade network is also forging a connection with DoubleClick Mobile in order to build upon Google’s spread in the burgeoning industry.

The ties made between all of the abovementioned networks, whether directly or indirectly, will, according to Google, enable publishers to sell graphic advertisements through a single gateway - that gateway being DoubleClick Mobile - to obtain “automated access to one or more neteworks of mobile advertisers.”

Google claims the the establishment of such partnerships will help publishers “better monetize their mobile Web content.” Given that DoubleClick Mobile is a component of the DoubleClick’s Revenue Center, which gives ad sellers one location from which to control marketing efforts, whether they be aimed at computer desktops and laptops or mobile phone screens, logic seems to favor DoubleClick when this level of coordination of this type is accomplished.

Download PDF version [53k]

MOUNTAIN VIEW, Calif. – April 17, 2008 - Google Inc. (NASDAQ: GOOG) today announced financial results for the quarter ended March 31, 2008.  “Our ongoing innovation in search, ads, and apps helped drive healthy growth globally across our product lines, yielding another strong quarter for Google,” said Eric Schmidt, CEO of Google.  “As we integrate DoubleClick into our advertising platform, we see exciting new ways to improve the user experience and increase value for our advertisers and partners.  Also, while exe

more news>>

Google is typically tight-lipped about it the inner workings of its search business, but there are a few nuggets worth looking at in a Popular Mechanics interview with Udi Manber, the Google vice president who oversees search quality. Among them: Google rejiggered its search algorithm 450 times last year.

The job of the algorithm is to best match Web pages with people’s search terms. One tweak the company tried last week was increasing the “diversity” of search results so the listed Web pages would cover a broader scope in an attempt to compensate for the ambiguities of search terms, he said.

And while some might see the industry of search engine optimization (SEO), which strives to get Web sites higher placement on search sites, as gaming the system, Manber said that at least a basic amount would make his life easier.

“I wish people would put more effort into thinking about how other people will find them and putting the right keywords onto their pages,” he said.

He also said Google doesn’t adjust search results by hand.

“If we find, for a particular query, that result No. 4 should be result No. 1, we do not have the capability to manually change it,” he said. “We have to find what weakness in the algorithm caused that result and find a general solution to that, evaluate whether a general solution really works and if it’s better, and then launch a general solution.”

For those interested in the subject, I also recommend the New York Times interview with Manber from last year and another from Eric Enge at SEO firm Stone Temple Consulting. (I can’t help but note that the latter piece shows up higher in Google search results.)

According to Millward Brown, that is, which puts Google at number one in its top 100 global brand list for the second time in a row. Millward Brown actually puts a price tag on a brand - an exercise in futility if you ask me - and claim that Google, the brand, is worth $86bn - 30% increase over last year’s number.

The next four spots are held by General Electric, valued at $71.4bn, Microsoft at $70.89m, Coca-Cola at $58.2m and China Mobile at $57.2m. If this list sounds slightly strange to you, have in mind that Millward Brown takes into account the financial performance of the company; so it’s not only the name that matters.

It’s no wonder, then, that Google is doing so well - its financial performance has been fantastic, and the brand is everywhere. From my subjective point of view which is currently looking at a full inbox with 20% of news being Google-related, I’d say that Millward Brown is right on this one.

One name that has done exceedingly well on both fronts, though, is Apple, which skyrocketed into the seventh place with a huge 123% increase in brand value, which is now worth $55.2m. One more year of Steve Jobs’ magic, and a good update to the iPhone, and they might be sitting in the second place next year.

See Millward Brown’s entire BrandZ report here [PDF].