• by Tameka Kee , December 5, 2007

Google's paid search money train will keep chugging, according to the search giant's top brass speaking Tuesday at the UBS Global Media & Communications Conference.

"All signs point to the fact we are growing our share of the search market," said Nick Fox, Google's director of business product management. "Users are using search more to do commercial things and we are seeing strong query growth, a driver of revenue."

Fox and Tim Armstrong, Google's president of advertising and commerce, North America, were bullish on potential search revenue and the expansion of Google's text-ad business.

Part of the strong financial outlook stems from the fact that Google has considerably more ads (and thus more revenue) than it chooses to serve because of adherence to Ads Quality standards.

"Our ads are the most relevant ads out there, but they aren't as good as our search results," Fox said. "We make decisions at Google to show substantially fewer ads than we have ads to show, because they don't meet our quality guidelines."

That leaves room for growth in click-through rates, and stronger click-through rates mean better return on investment for advertisers. "As they're able to get higher ROI, they can afford to pay higher costs-per-click and buy more ads," Fox said. And the good ads-good clicks-more spending cycle continues.

When asked about the mortgage meltdown and its ensuing drag on the overall U.S. economy, Fox said that the search giant's advertiser base was well diversified -- minimizing the vulnerability that could come from one particular vertical's cutbacks. "When the mortgage business went down, we saw some weakness," Fox said. "But then we also saw search terms like 'foreclosure' and 'California foreclosures' spiked in traffic."