, Columnist
Peering Inside Google's $19 Billion Black Box
Traffic acquisition costs raise concern about pressure on margins.
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There's a $19 billion black box inside Google. That's the yearly amount Google pays to companies that help generate its advertising sales, from the websites lined with Google-served ads to Apple and others that plant Google's search box or apps in prominent spots.
Investors are obsessed with this money, called traffic acquisition costs, and they're particularly worried about the growing slice of those payments going to Apple and Google's Android allies. That chunk of fees now amounts to 11 percent of revenue for Google's internet properties. The figure was 7 percent in 2012.