Google will miss expected earnings numbers tomorrow (IMO). There are two recent “shoot your own foot” actions from Google that may affect their short term performance. Overall, I agree with the changes, but I wouldn’t be swinging into earnings tomorrow.
(1) Google changed the “hit area” of their AdSense ads. Before the entire ad area was clickable. Now just the heading and url are.
There are mixed reports on whether or not this is affecting overall click through rates (CTR) and earnings. On InvestorGeeks, our CTR went from 2-2.25% in September and October to 1.25-1.5% in December and January. Our overall earnings are down 40%.
Most of Google’s revenue comes from their own search page which likely had smaller drops (if at all). But if other sites have had slowdowns like we have, this would eat into Googles earnings growth.
In the long run I think this is a good move, as it will cut down on fraud… eventually leading to more advertisers and higher ad rates. In the shot term, however, folks are taking a hit.
(read on for reason #2)
