The web is working for American businesses
The web is where we go to find things—that somewhere special to eat tonight, the directions to guide us there and suggestions for that one-of-a-kind present for the birthday girl. Ninety-seven percent of Americans who use the Internet are looking online for local goods and services using their computers and mobile devices.
The growth of our Internet use has naturally helped the ecommerce industry to expand rapidly over the past decade. But the web is also positively impacting brick-and-mortar businesses. According to Boston Consulting Group, American consumers who researched products online last year spent almost $2,000 actually purchasing those products offline. That’s almost $500 billion that went directly to main street retail. All in all, it’s clear that the economic impact of the web is huge; the Internet is where business is done and jobs are created.
We’re proud to be part of such a dynamic industry, and we’re committed to helping make the web work for American businesses. Through our search and advertising programs, businesses find customers, publishers earn money from their content and nonprofits solicit donations and volunteers. These tools are how Google makes money, and they’re how millions of other businesses do, too.
In fact, in 2011, Google’s search and advertising tools helped provide $80 billion of economic activity for 1.8 million advertisers, website publishers and nonprofits across the U.S. You can see the state-by-state breakdown on our economic impact website.
Take one example: King Arthur Flour, a great New England baking company. King Arthur has been a well-known local company since George Washington was President, but has recently used the web to grow into an internationally-renowned baking business. Similarly, Nebraska’s 80 year-old Oriental Trading Company shifted some of its catalog-based marketing to the web, and now sells 80 percent of their toys and novelties online. Or consider New Jersey’s Bornstein Sons home maintenance and repair contracting business, which was founded 70 years ago and recently began to advertise online. They now get one in four of their new customers from the web.
These are just a few examples out of the hundreds of thousands of businesses who are growing and hiring thanks to the web. And Google is committed to getting even more businesses online. Over the past year, we’ve been traveling the country with our Get Your Business Online program, encouraging businesses throughout the U.S. to create free websites and reach more customers. So far, we’ve worked with thousands of businesses to launch their new websites.
It’s a fact that the Internet is creating jobs and helping the American economy grow. And we’re proud to be a part of that process.
Trading over the Internet
In the Stone Age, as humans struggled to survive and build, they traded for food and tools. In the Age of Discovery, as explorers traversed the seas, they traded spices. And now in the Information Age, as the Internet becomes an increasingly robust business platform, all kinds of goods and services are traded online every day.
Thanks to the Web, trade has never been easier. Companies large and small can have easy access to a global marketplace. And in that way, the free flow of information without restriction across the Internet is contributing to growing economies across the world.
Fortunately, several countries and entities have recognized the critical role that open information flows play in trade and economic growth. Just a few weeks ago, the United States and Japan signed new information and communications technology principles which support open government and the free flow of information across national borders. That agreement comes on the heels of similar principles signed by the U.S. and EU and members of the U.S. business community last year.
We hope that more governments and industries will recognize the role that the free flow of information plays in the global economy. A consistent and transparent framework for cross-border flows of goods, services and information will help individuals and businesses around the world.
Announcing our Small Business Toolkit
It's no secret that Google started out as a small business operating out of a Silicon Valley garage. We've consistently supported small business growth because we understand that our success depends on the success of our small business partners. With that in mind, earlier this year we launched the Small Business Network to help small businesses track legislation that might affect their growth.Today, we're pleased to announce that we've redesigned our Small Business Network website to serve as a product toolkit in addition to a policy monitor. Entrepreneurs will be able to learn about products that help them run their businesses more efficiently and exchange ideas and best practices with other entrepreneurs, all while keeping up with legislation pending in federal and state governments that could affect their bottom line.
Over the next few months, we'll also be traveling the country, bringing free interactive workshops -- or as we call them, "Small Business 101s" -- to local businesses across America. These workshops are intended to help entrepreneurs become more familiar with online tools proven to help them succeed. Our next event is on September 22, 2009 at our Pittsburgh office. If you're in the area and would like to join us, please sign up here.
We're working to come up with products, services and programs that will help small businesses start up, stay up, and grow, because it's obvious that small business is the backbone of the economy. According to the U.S. Small Business Administration, small businesses have generated more then 64 percent of the new jobs created over the last 15 years. Today, small businesses also pay 44 percent of the total payroll in the United States and hire 40 percent of the high-tech workers in this country -- like scientists, engineers and computer programmers.
As our country recovers from the recession, it's important to remember that many Americans will continue to face a long and difficult road as they struggle to pay bills or find work over the next several months. Enabling and promoting small business growth is a vital part of the solution.
What technology can do for economic recovery
Later this month, members of the G-20 will travel to Pittsburgh to talk about the health of the international economy and the institutions that manage it.
Now's your chance to have your voice heard by joining Google CEO Eric Schmidt in a discussion on what technology can do for economic recovery.
We're hosting this talk with the Pittsburgh Technology Council on Wednesday, September 23 at Heinz Field in Pittsburgh. If you'll be in town, click here for more information on joining us.
Got a question for Eric but can't make it to PA? Submit your question now through Google Moderator or vote on the questions that others submit -- we'll ask the top rated questions at the event.
Measuring the impact of the Internet on the economy
With news of bankruptcies and bailouts dominating the headlines recently, it's easy to lose sight of one of the bright spots in our economy: the Internet. In an incredibly short amount of time the Internet has emerged as a key driver of economic growth, creating millions of American jobs that generate hundreds of billions of dollars in economic activity.
This afternoon a new study commissioned by the Interactive Advertising Bureau put some real numbers on this very point. According to Harvard Business School professors John Deighton and John Quelch, the Internet is responsible for 3.1 million American jobs and $300 billion in economic activity spread throughout the United States. As Professors Deighton and Quelch put it, the web "has created unprecedented opportunities for growth among small businesses and individual entrepreneurs."
As the report makes clear, it's difficult to overstate the social and economic benefits of the Internet on the United States. Unlike any other platform in history, it has empowered entrepreneurs to start new businesses and connect with customers around the world, and has provided users with access to unprecedented amounts of information.
We think it's important for policymakers to understand the social and economic benefits of the Internet. That's why I was happy to see IAB also announce this afternoon the launch of the Long Tail Alliance, a group of small independent online businesses working to educate policymakers about the benefits of online advertising and to advocate against burdensome restrictions that would damage the Internet economy. In conjunction with the release of the new study, a group of Long Tail Alliance members representing 25 Congressional districts and 13 states took a maiden voyage to Washington to tell Congress their story. Check out some of what they have to say at "I Am the Long Tail."
As the Internet economy continues to grow, we hope Members of Congress turn to groups like the Long Tail Alliance, the Google Small Business Network, and others to better understand the tremendous economic and social benefits of the web and its impact on small businesses and entrepreneurs across the country.
Eric Schmidt on "Meet the Press"
Is confidence returning to the economy?
Google CEO Eric Schmidt sat down with NBC's David Gregory on the floor of the New York Stock Exchange to weigh in with his thoughts. He appeared alongside Caterpillar's Jim Owens and Xerox's Anne Mulcahy on this Sunday's "Meet the Press." Check out this exchange from yesterday's broadcast:
Small businesses and broadband access
If you're a small business owner without access to high-speed Internet, you may sometimes feel as though you're operating with one hand tied behind your back. Unfortunately, that's business as usual for countless companies across the country -- especially those in rural and underserved areas -- that still lack access to broadband.Small businesses are the backbone of the American economy, with companies that have fewer than 500 employees providing jobs for more than half of the nation's private workforce. With more and more consumers going online, the Internet provides these companies with unprecedented opportunities to reach millions of new customers worldwide -- a reach that was once limited only to the largest corporations. Now more than ever, policymakers should ensure that small businesses have the tools necessary to succeed in a 21st century economy.
The American Recovery and Reinvestment Act sets aside $7.2 billion to improve the nation's broadband infrastructure. As we celebrate National Small Business Week, we'd like to invite small business owners to share their opinions on how the stimulus money should be spent through our new Small Business Network. You can sign up and learn more here.
Since we launched the Small Business Network just two weeks ago, nearly 1,000 members have joined the conversation. If you're the owner of a small business, we hope you'll sign up to stay informed on broadband access and other public policy issues that affect you and find out how you can get involved.
Tracking federal spending on Google Maps
Visualizing where federal tax dollars are actually being spent can be a daunting task. Consider the TARP Capital Purchase Program, through which the government has already distributed hundreds of billions of dollars to banks across the country. Or the American Recovery and Reinvestment Act, which contains nearly a trillion dollars in spending and is several hundred pages long (not exactly beach reading).
Enter Google Maps.
This week the Treasury Department released a Google Maps mashup of TARP recipients nationwide. The mashup allows engaged citizens to easily review which local, regional, and national banks are participating in the Capital Purchase Program and how much money they've received:
View FinancialStability.gov - Transaction Data in a larger map
Last week Rep. Doris Matsui (CA) launched a new Google Maps mashup highlighting where stimulus dollars will be spent in her Sacramento-area district:
View Larger Map
Meanwhile, the GOP is using Google Maps to pinpoint congressional earmarks. Earlier this month Republican Hill staffer Tom Jones created a series of maps mashups that outline earmark spending. Here's a map outlining earmarks in the Transportation and Housing Section of the Omnibus Appropriations Bill:
View Larger Map
Jones created similar maps for the FY09 Labor, Health, and Human Services, Energy and Water, and Commerce, Justice, and Science appropriations bills.
It's great to see policymakers using Google Maps to make government spending more accessible to taxpayers. Do you know of other Maps mashups that are being used to track federal spending? Let us know in the comments.
Eric Schmidt talks technology and the economy on "Meet the Press"
What role can technology play in generating economic growth and creating jobs?
This morning Eric Schmidt, our CEO, addressed that very question on NBC's "Meet the Press." He was joined by Michigan Governor Jennifer Granholm, former Hewlett-Packard CEO Carly Fiorina, former Massachusetts Governor Mitt Romney, and Wal-Mart President & CEO Lee Scott for a roundtable discussion on the state of the economy.
For those of you who missed it, check out the video (the segment begins at 20:35):
Small businesses finding success online
What do a hunting dog supply distributor, an online diamond retailer, and a home repair guru have in common? They were all up on Capitol Hill yesterday talking with lawmakers about the positive effects of online advertising on their small businesses. Check out video of their testimonies before a subcommittee of the House Small Business Committee.
Small businesses are driving economic growth and freedom of expression across the Internet, and online advertising is playing a key role in their success. Take Rob Snell, co-owner of Gun Dog Supply, a hunting dog supply store that was started by Snell's parents in their Mississippi home in 1972. Today, Gun Dog Supply has customers well beyond Mississippi thanks to advertising tools like AdWords, which have enabled the Snells to build a multi-million dollar business catering to hunting enthusiasts around the globe (anyone looking for a bright orange dog collar?)
Tim Carter, who runs home-improvement site Ask The Builder from his home in Cincinnati, also shared his success story with the subcommittee:
AdSense is helping Tim sustain his vibrant publishing business by making it easier for him to show ads on his site. In Tim's words, online advertising enables him to "publish thousands of my past columns and hundreds of my short videos for free... and allow millions of people... to have unparalleled access to content like never before." Tim's site is just one of hundreds of thousands of small online publishing businesses that exist in large part because of online advertising.
We're excited to play a part in the success of these entrepreneurs. And we'll continue talking with policymakers about our partnerships with the long tail of online businesses.
Creating opportunities for small business to thrive
It's generally understood that Google's free products like Search, Gmail, and many others are supported by advertising. What is not as well known is that, in addition to providing useful products to our users, Google is a platform for and a partner to small businesses across America.
This morning David Fischer, our VP for Global Online Sales and Operations, will testify before the U.S. House Small Business Committee to explain just how Google has become an engine of economic growth and opportunity for hundreds of thousands of small businesses.
In his testimony, David will talk about how Google AdWords enables small businesses of all kinds to place ads for their products and services next to Google search results, giving them access to millions of our users around the world. Small businesses can set their own ad budgets and can arrange to pay only when users click on an ad. As a result, these businesses able to find and connect with new customers more efficiently and cost-effectively.
In addition to helping small businesses find customers and grow, Google's AdSense program has enabled web publishers, an entirely new generation of small businesses, to emerge and thrive on the Internet. As David's testimony puts it,
The impact of Google's technology on the small business economy is significant. In 2007, for example, we paid $4.5 billion to AdSense partners who use our ads to earn money from their websites.
Behind those numbers are the real stories of people like Regina Fagan:
Finally, David will highlight the fact that small business success stories like Regina's are a powerful testament to the importance of maintaining a free and open Internet. The Internet's freedom and openness gave Google a chance to succeed when it was a brand new business, and it is giving hundreds of thousands of American small businesses today a chance to compete and thrive on the web as well.
UPDATE: Check out video below of David Fischer's testimony:
Continuing the Internet tax moratorium
As Internet use continues to spread in the U.S., the government should pursue policies that help promote investment in, and greater consumer access to, faster and more robust broadband services. The current Internet tax moratorium is one policy that Congress has enacted to help make the internet a universally accessible, free, and open platform capable of delivering a rich variety of services to consumers.
With that moratorium due to expire this November, Google recently joined Don't Tax Our Web, a coalition of companies and associations dedicated to extending the current moratorium and reducing barriers to the Internet's continued growth.
The current moratorium prohibits three things: state and local taxation of Internet access, multiple taxes on a single e-commerce transaction, and taxes that discriminate against online transactions. We support a permanent extension of the moratorium because multiple or discriminatory taxes on internet transactions could damage internet-based commerce, a critical and growing component of our economy.
What are these "multiple or discriminatory" taxes, exactly? Imagine a web user who purchases a music file (maybe "One Week" by the Barenaked Ladies, which was released in 1998, the year the original moratorium was signed into law by President Clinton). Under current law, the transaction couldn't be taxed at a higher rate than if the sale had occurred in a physical store or through any means other than the Internet. In addition, the moratorium prohibits more than one state, or more than locality, from taxing the transaction. Protecting internet-based transactions like this from multiple and discriminatory taxes makes a lot of sense to us.
Keeping Internet access tax-free is also another way that government can help further the growth of the web to all corners of the U.S. At a time when American policymakers are working to increase broadband penetration rates and improve the quality of broadband services to consumers, we believe that increasing barriers to access -- whether they are created by the government or by the private sector -- will only frustrate our common goal of greater access to better broadband for all consumers.
We look forward to working with the members of Congress championing this issue and with the Don't Tax Our Web coalition to extend the internet tax moratorium.
