Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of

CHAPEL HILL, N.C. – Google is big business for small businesses across the USA, especially in states such as North Carolina, Georgia and Florida. Yes, high-tech states California and New York generate more dollars thanks to the search engine giant. But Google’s impact in the southeast and elsewhere shouldn’t be underestimated.

Google (Nasdaq: GOOG) executives trotted out across the country Tuesday to unveil the company’s first report. And Chapel Hill’s home-grown and true tar Heel blue “Johnny T-shirt” hosted a media event at its east Franklin Street headquarters where the company touted how it is making plenty of green with Google’s assistance.

Touting its Google Search and AdWords as well as Google AdSense programs, company executives stressed how hundreds of thousands of small businesses are generating leads, sales and revenues. Google calculates that in 2009 it generated $54 billion nationwide for its partners. And they called that estimate, based on multiples of actually dollars spent, as “conservative.”

Heather Frazier of Johnny T-Shirt said the company made the decision to sign up with Google in 2003 after a phone call from Google about how its programs might help drive sales.

“Without that exposure, there is no way we would have had the growth we have experienced,” Frazier told Local Tech Wire. She says Johnny T-shirt promotions draw a “click-through” or response rate of 5 percent, and of those she estimates “a majority – in the 65 to 70 percent range” end up buying some sort of UNC-linked memorabilia or clothing.

That click-through rate is exceptional, given Google’s estimate of a 2 percent average for its clients,

In its 50-state report, Google also acknowledged Twiddy, a 100-employee company in Duck, N.C., that rents vacation homes.

Here’s the breakdown for North Carolina:

• 39,600 businesses, advertisers and website publishers work with Google.

• The estimated economic value based on Google’s methodology was nearly $779 million.

• Google also awarded 70 grants worth almost $1.2 million to non-profits.

By the way, Google’s presence in the state extends well beyond its advertising and search partners. Google has a team of engineers in Chapel Hill working on Android mobile solutions. And the company also operates a huge data center in Lenoir.

Southeast impact – Georgia tops $1.4 billion

Other state snapshots:

• Georgia: $1.4 billion of economic activity for 48,000 businesses, website publishers and non-profits.

• South Carolina: $254 million of economic activity for 15,000 businesses, website publishers and non-profits. (Google has a data center in the state, too.)

• Florida: $3.2 billion of economic activity for 119,000 businesses, website publishers and non-profits.

• Virginia: $962 million of economic activity for 40,000 businesses, website publishers and non-profits.

• Tennessee: $423 million of economic activity for 23,000businesses, website publishers and non-profits.

California led the way, of course, with as Google noted: “$14.1 billion of economic activity for 263,000 California businesses, website publishers and non-profits.”

New York fared well, too: “$6.3 billion of economic activity, 115,000 partners and non-profits.

Nationwide, Google reported it is working with some 1.5 million publishing and advertising partners.

Consumer group not happy with Google

However, not everyone reacted positively to Google’s report, especially since the search giant suffered a public black eye with last week’s disclosure that it gathered private data worldwide during mapping projects. (They call the data gathering “WiSpy.”)

Criticizing the report, John Simpson of the California-based complained:

“This is what every big corporation does when they are under fire. They divert attention from their wrongdoing and spin a story about their contributions.”

The group charged Google’s report contained “cooked data” while not “factoring in none of the very real costs Google places on society.”

“What’s the economic cost to the content providers whose material is grabbed without payment or the competitor whose listing is banished to the nether regions of results because of Google’s monopolistic control of search?” Simpson said. “What’s the cost on society to maintain Google’s extensive network of energy-eating server farms?”

Tuesday’s report was the second rare disclosure by Google about its business operations. On Tuesday, it spelled out how advertising and search revenues were split with partners.

As The Associated Press noted:

“The greater transparency is occurring amid increasing regulatory, political and legal scrutiny of the power that Google has amassed while building the Internet’s most profitable ad network around the Web’s most popular search engine.”

According to Google, 68 percent of revenue from ads placed by partners goes to those firms.

For ads that appear in Google’s search results, the partners receive 51 percent of the money.

Whatever the split, Johnny T-Shirt is benefiting in big ways. The company more than doubled the size of its warehouse in nearby Hillsborough in 2007, and sales continue to grow.

Actually, “Business is booming,” Frazier said. “It’s not slowing down.”

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