Google builds up New Zealand business

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's growing at the expense of newspapers and television.

Employee benefits jumped 76 per cent 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 per cent to $6.8m.

"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 per cent to $366m last year, while for newspapers the decline was 7.2 per cent to $540m and TV dropped 0.6 per cent to $614m, according to Advertising Standards Authority data.

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

Google 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 longstanding antitrust investigation.

California-based Google has a market value of about $US286 billion ($NZ338b), or about $US109b larger than New Zealand's economy.

Last year it lifted profit by 10 per cent to $US10.7b as sales rose 32 per cent to $US50.2 billion.

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