Yahoo!Yesterday’s WSJ (subscription required) reported that Yahoo’s CEO, Terry Semel, hinted of a slowdown in search ad revenue growth. Significant news – search ad revenue growth has always been on the incline. His statement preceded a 12% drop in the stock price for YHOO (rival GOOG took a hit as well, dipping the price blow the $400 mark). Another big setback for the industry’s #2 player. Last month Yahoo! delayed it’s release a long awaited software upgrade that has caused it’s stock to take it’s biggest plunge in history – 22%.Analysts have been wondering if the search industry is a bubble waiting to pop.

Danny Sullivan, considered the search industry’s top expert, doesn’t think so.
Regarding the state of the search economy, Sullivan so eloquently, puts it:

“In fact, as I told a reporter yesterday, I think search will be just fine given its history. Search was booming during the ad downturn of 1999-2001. It was booming because of its highly measurable, highly converting nature. Born from a downturn, I expect it will continue to ride out any future ones, if not benefit from them.”