Google Shocker: Paid Click Hits Wall

Google Shocker: Paid Click Hits Wall
Posted Feb 26, 2008 09:46am EST by Aaron Task in Internet, Recession
Related: GOOG
Google shares are getting hit early Tuesday after comScore's report on a startlingly big decline in paid click growth. Google's January paid click growth was flat on a year-over-year basis, down 7% from December and down 12% from the fourth quarter. UBS cut its earnings estimate and price target in response.

The comScore data provide further evidence that Google is not recession proof and it looks like somebody got wind of this report as GOOG shares were notably weak Monday in an up tape. This decline probably represents an opportunity for believers in Google's long-term story but the short-term pain isn't likely over yet.

Netimperative, UK - 8 hours ago
Online ad revenues reached a record high of over $21bn in 2007 Internet Ad Revenue Exceeds $21B in 2007
1 day ago

NEW YORK (AP) — Online advertising revenues exceeded $21 billion for the first time in 2007, although preliminary data compiled by an industry trade group also suggest growth is slowing.

The Interactive Advertising Bureau said its estimates show ad revenues grew 25 percent last year from nearly $17 billion in 2006. In dollar amounts, the estimated gain was $4.2 billion — less than the 35 percent and $4.3 billion growth seen in 2006 over 2005.

Analysts have said the growth rate was bound to slow as the Internet commands a larger share of the advertising pie, taking dollars away from traditional media like newspapers. By most accounts, the Internet still represents less than 10 percent of all U.S. ad spending, meaning there's room for a lot more growth, even at a slower rate.

PricewaterhouseCoopers LLP, which conducts a quarterly survey for the advertising trade group using data from the 15 largest online ad sellers, said fourth-quarter revenues totaled about $5.9 billion, topping the previous record of $5.2 billion in the third quarter.

David Silverman of PricewaterhouseCoopers said the latest record numbers demonstrate that interactive media continue to be important to consumers and marketers.

The IAB said final data and breakdowns by ad types would be available in May. Typically, the most lucrative are keyword ads such as those displayed alongside search results at Google Inc. and other search engines

Note that a "decline in growth" does not mean "sales are down". In fact, the article says they are on par with the previous year.