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Google Ad Clicks Flat, Ad Market Slowing

Quality initiatives may be the cause

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Days of robust 25 percent and up growth for Google’s online advertising business have yet to return in 2008.

The comScore report on paid clicks made its way to financial institutions, with its details leaked in a few places online. ComScore delayed publication of that report for at least one day from its expected release date.

It’s out there now, and the ramifications of the report show why they may have chosen to hold it back for 24 hours. Investors may think otherwise, but we aren’t seeing cause for optimism.

Barron’s cited 3 percent growth in ad clicks year over year for Google in February. 2008 is a leap year, giving February an extra day.

We’re motivated to think February 29 had more to do with Google’s 3 percent increase than anything. Especially since comScore said paid clicks decreased month over month from January, down 3 percent.

However, Bank of America called for calm. “We believe most of the deceleration is due to the continuing quality initiatives by the company itself, which should drive significant upside longer-term,” their analyst Brian Pitz said, per Barron’s.

Google will open at $448 on Wall Street this morning, following a $10.19 drop in after hours trading Wednesday night. The over-2 percent decline took place as the impact of the comScore data reached investors.

Given the typical investor behavior when confronted with less than glowing news, this could shape up to be an ugly day for Google in the market.

Google Ad Clicks Flat, Ad Market Slowing
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  • http://www.kannada-greetings.com sanjay

    IMO its also the global recession is also a factor. Many companies have been booking losses because of this. Any way we will wait and watch the full report.

  • http://honestgain.890m.com/ Albanus Alain
    However, Bank of America called for calm. "We believe most of the deceleration is due to the continuing quality initiatives by the company itself, which should drive significant upside longer-term," their analyst Brian Pitz said, per Barron’s. 

    Continuing qulity initiatives or continuing more competitors? Kinds of political talk to me. You see, there are a lot other companies trying to immitate google’s step in advertising (even immitate its style) but with lower price for advertisers. Well, we wait and see, shall we? May be it’s only a temporary setbacks.

  • Guest

    Interesting story. Actually,  for a long time Google’s revenue have been padded up by click fraud and other tricks such as paying only a very small fraction to Adsense publishers. As advertisers and publishers have wisended up, it is becoming harder for Google to maintain the scam.

     

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