CIO Symmetry

Oct 9 2008   2:02PM GMT

Google and the tech stock drop

Kristen Caretta Kristen Caretta Profile: Kristen Caretta

Yes, even Google, one of the Internet companies best-positioned for a financial downturn, has falling stock. I watched the real-time trading with sick fascination as the little red down-turned arrow blinked again and again. Maybe it’s not as surprising to some; stocks go up and down on a regular basis. But the stock dropped more than $50 since last week, hitting the lowest numbers since March 2006. Analysts have cut back their earnings estimates for Google based on the weakening global economy and the rally of the dollar. But analysts remain optimistic on search advertising’s strength in a potential advertising recession

Google, a search advertising money-making machine, essentially organizes online information and then throws some ads on it. This search advertising brings in about 40% of the $40 billion online advertising dollars spent each year, overpowering the likes of Microsoft Live and Yahoo. So what is a company like Google to do when the times get tough?

Look for more advertising opportunities?

The New York Times reported that Google released AdSense for Games, offering 15- to 30-second commercial-like ads bringing more advertising formats to brand advertisers. Google will also start click-to-buy advertising on YouTube with the YouTubevertorial. A Google blog post on the matter describes the click-to-buy links as “nonobtrusive retail links, placed on the watch page beneath the video with the other community features.” Essentially, users interested in the material can get instant gratification and click to buy the song, game, etc.

Already bombarded by ads wherever we go online, I’m curious to see how these new ad formats will affect the typical Web user. Will we get bogged down with advertisements in a financial slowdown?

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