Posted January 21, 2009 8:17 pm by with 2 comments

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By Carrie Hill

Tomorrow after the market closes, Google will release their earnings report and it looks like they’re racing to make that bottom line look more appealing to investors.  Let’s break down the issues for stock-market-novices like myself.

As Andy reported earlier this week, search spending was down around 8% for the 4th quarter—but according to an article in MediaPost, the clicks are still coming in. Ad pricing is declining to keep people spending money on the revenue model.  The shoppers are still there, but making the end-sale is a now bit more difficult and people are more reluctant to invest in PPC when the cost per conversion is rising—hence the drop in cost per click rates. 

Declining click prices have impacted the revenue from paid ads and the “Big G” is working their personnel and product investments to make up for that decline in revenue.  Earlier this month they reported cutting staff and shuttering and/or combining projects due to a drop in expected revenue.  Yesterday they announced they would stop selling newspaper ads on February 28th.

All of this doom and gloom aside, the truth is Google still is expected to post earnings of $4.96 per share and a revenue of $4.12 billion for the quarter according to analysts surveyed by Reuters.  The game is to keep the gains as high as possible so confidence is maintained and stock prices are stable.

Carrie Hill is the SEO Team leader for Blizzard Internet Marketing where she specializes in optimizing travel, tourism and accommodations websites.

  • If google is struggling to maintain its profitability what would be status of others. Can we expect some giants to go down during this year as happened in the finance and industrial sectors? Why not do an article on the health of the internet based organizations.

  • It would be quite surprising if Google was the only company who did not suffer from the current economic situation.

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