Way to Go Google! – Earnings Exceed Expectations

Posted on | October 17, 2008 | Comments Off

Disclaimer – I don’t have a position in the stock.

Google delivered a good earnings report after the bell last night and even with the Dow down over 200 points this morning, the stock (GOOG) opened up over $20 this morning.  Yesterday, the speculation was that the internet search giant results would be decent to dismal particularly after many analyzed announced an anticpated slow down for web advertising.

While Google’s earnings are hardly proof that a business recession isn’t going to affect search marketing, it does appear that Google is better positioned for the ad spending cuts that may be or will occur over the next 6 months.  This is consistent with our general advice to any client – spend your money on Google first and until you can’t no longer get a good return on your ad spend.

In addition to Google’s positioning, I think that they have taken several steps with their Adwords algorithm in the last few months as they made changes to their Placement Network, Automatic Matching, and the number of low-quality ads that are being shown.  These steps (forward, maybe?) may help them extract more money from their advertiser base even if consumer confidence is lacking.

Category: Research Engine
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