Google stacks on NZ jobs, pays little tax – again

Google New Zealand, the local service hub of the world's biggest search engine company, stacked on workers last year to keep pace with an online advertising market that is growing at the expense of newspapers and television.

Employee benefits jumped 76 percent to $4.2 million in calendar 2012, the company's financial statements show. Service revenue, which is essentially payments from the parent for promotion and marketing of Google products such as AdWords, climbed 53 percent to $6.8 million.

"Over the last year we've been growing our team in New Zealand to help more local marketers and businesses of all sizes make the most of online opportunities," according to an emailed statement from Sydney-based spokeswoman Annie Baxter.

Spending on interactive, or online, advertising in New Zealand rose about 12 percent to $366 million last year, while for newspapers the decline was 7.2 percent to $540 million and TV dropped 0.6 percent to $614 million, according to Advertising Standards Authority data.

Online's share of the market rose to about 17 percent from 15.1 percent in 2011.

Google NZ's advertising and promotional expenses rose 76 percent to $253,449 and spending on travel rose 10 percent to $768,312. It paid $165,526 in New Zealand taxes, up from $109,038 a year earlier, and reported a net loss of $359,197, up from a loss of $52,235 in 2011.

The local unit describes its activities as providing "services, consulting, advice and assistance required in connection with marketing and sales support activities for the business of developing, marketing and selling certain web search services and related products".

The careful wording reflects the global structure of Google, where much of its sales are billed out of Google Ireland – arrangements that have drawn ire from regulators and lawmakers in the UK and France, who say the company doesn't pay enough tax for the amount of profit it reaps.

The European Commission is trying to reach a settlement with Google of a long-standing anti-trust investigation. Google has the dominant search engine in Europe and the EC has said the company may favour its own services over competitors in search results, Bloomberg reported.

Mountain View, California-based Google has a market value of about $US286 billion, or about $US109 billion larger than New Zealand's economy. Last year it lifted profit by 10 percent to $US10.7 billion as sales rose 32 percent to $US50.2 billion.

Its shares fell 0.5 percent to $US857.23 on the Nasdaq yesterday and have gained 44 percent in the past 12 months.

(BusinessDesk)