Google Keeps Thriving Despite Tough Environment

post from Internet Sector and Stocks Analysis from Seeking Alpha on 21 November 2008 02:51:09 AM. © Internet Sector and Stocks Analysis from Seeking Alpha

Ockham Research submits:

A study of online advertising was recently released by the Interactive Advertising Bureau and PricewaterhouseCoopers. What it revealed is that internet advertising is growing despite the economic downturn. Total online advertising revenue for the third quarter neared $5.9 billion. That’s an 11% improvement from last year’s third quarter and a slight 2% gain from the previous quarter. The study also concluded that year-to-date web advertising has brought in $17.3 billion, which is an improvement from $15.2 billion through three quarters in 2007. This study should not be considered the final authority on interactive advertising, but it does demonstrate an apparent resilience in the face of economic hardship.

The study is welcome news to Google (GOOG) which has seen its stock fall by 60% so far this year. Apart from the generally negative momentum of the stock market, Google’s stock has suffered from the expectation that its search-engine-based advertising would suffer as companies strip their marketing budgets. Advertising has been curtailed significantly as many retailers are struggling and the automakers are just trying to stay in business. However, the brunt of the pull-back has been felt in more traditional media like television and print. Growth in what is termed interactive advertising has not suffered nearly as badly. One potential reason is that interactive advertising results are more easily quantifiable because mouse clicks are tracked. By tracking where eyeballs are looking, advertisers can know what is working and what is not, which is of course very valuable.

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