Investors in Google had a fright this week. A report from comScore found that paid-click revenue from Google has seen a sharp fall in growth. Was the miraculous Google growth story coming to an end? Many shareholders in the company thought it was, and shares fell by a third.
Yesterday, though, a ray of light shone down from Mountain View California.
Google maintains that it has been improving its technology in order to try and reduce the number of accidental clicks.
This would mean that revenue would fall in the short-term, but theoretically, as advertisers’ confidence increases, then rise.
Sanford Bernstein analyst Jeff Lindsay wrote in a note to clients, “We acknowledge that Google’s growth in paid search has to decelerate over time, but we do not believe that the current macro-economic conditions are undermining Google’s paid search business.”
We have argued before, that in the world of online retail, position on Google takes on a similar level of importance as position on the High Street for a traditional retailer.
The money then that an online retailer spends on Google, does not just come out of advertising budget, it should come out of the money that would otherwise have been set aside for rent.
This is why we think the Google story has got more chapters of growth yet.
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