NEWS: Google's Decelerating Clicks

Google's Decelerating Clicks

Analysts Are Divided 
About the Significance 
Of Advertising Data

By SCOTT MORRISON March 28, 2008

Google Inc.'s short-term outlook has grown increasingly murky in the wake of new data showing weakness in the number of consumers clicking on the Internet giant's search ads, the source of nearly all of the company's revenue.

The February data from research group comScore Inc. marks the second consecutive month that Google's paid-click data disappointed analysts and investors, who responded by driving the company's shares down 3.1% Thursday.

•  The News: A report from research firm comScore suggests growth in the number of clicks on Google's search ads continues to slow.

•  Background: Google says the deceleration is due to steps it has taken to improve the quality of clicks.

•  Outlook: Analysts are split about the impact on Google's first-quarter results.

But analysts were divided about the reasons for, and the impact of, the disappointing data. Some suggested economic weakness could cause Google to fall short of Wall Street's first-quarter estimates, while others argued that efforts by the company to trim the number of clicks -- which should enable it to increase the amount it charges per click -- will boost the company's long-term prospects.

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View	NEWS: Google February Paid Clicks Lousy (Again)

Ed: Google has hit the wall on click supply - regardless of CPC demand. They are hoping that the average CPC will rise enough to compensate. Don't bet on it. Millions of SEM folks continue to pay a penny hoping for any click. ;-)