Originally published Thursday, April 17, 2008 at 12:00 AM
Ad-click growth slowed on Google during first quarter
Google saw a 1. 8 percent rise in users clicking on its text advertisements last quarter, slower growth than in the previous period, according...
Bloomberg News
Google saw a 1.8 percent rise in users clicking on its text advertisements last quarter, slower growth than in the previous period, according to Lehman Brothers.
Clicks on Google's sponsored links — four-line ads that mostly run alongside search results — rose 2.7 percent in the last month of the quarter, according to Lehman analyst Douglas Anmuth, who cited data from the research firm ComScore.
Google depends on the ad clicks, which jumped 25 percent in the fourth quarter, for most of its $16.6 billion in annual sales. Record oil prices, rising unemployment and a mortgage crisis dragged down U.S. consumer confidence to a 26-year low in March. That may have made online shoppers less interested in Internet ads.
"The recession is impacting consumer search behavior," Clay Moran, an analyst at Stanford Group said Tuesday in a report. "Consumers are searching less for commercial items."
Google shares rose $8.19 to $455.03 Wednesday. The shares have tumbled 34 percent this year.
Google reports first-quarter results today. Excluding revenue passed on to partner sites, sales rose an estimated 42 percent to $3.59 billion, according to a Bloomberg survey of analysts. Sales a year earlier jumped 66 percent.
Google extended its lead in the U.S. Internet-search market last month, with its share of queries rising to 59.8 percent from 59.2 percent in February, ComScore said in a separate report. Yahoo fell to 21.3 percent from 21.6 percent, and Microsoft slipped to 9.4 percent from 9.6 percent.
To challenge Google in the $41 billion online-advertising market, Microsoft is trying to buy Yahoo for $44.6 billion. Yahoo rejected the offer in February, calling the bid too low.
Copyright © 2008 The Seattle Times Company
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