SearchIgnite: Google's Demise Not Imminent

The sky is not falling. According to data from a new SearchIgnite report, clicks on Google search ads were up by almost 46% in January and mid-February--in contrast to the downward trend reported by comScore on Monday.

Google's stock has been pummeled in the past week, with share price dropping by more than $22 to hit $464 on Tuesday--tied to a comScore report citing a 7.5% drop in clicks on paid search ads from the previous month. That's almost a 40% price plunge from the high of $747 last November, and it has some in the marketplace predicting Google's demise. Not so, say a number of sources, including pundits from trade publications like Search Marketing Standard, financial analysts from firms like JP Morgan, as well as New York-based SearchIgnite.

SearchIgnite analyzed the performance of its clients' ads over the first 45 days of the year and found that clicks on Google ads were up nearly 46% year-over-year --while comScore found that Google's clicks had remained relatively flat (down by 0.3%) in January. The search automation tech firm also found that total ad spend on Google was up by 40% versus the same time period in 2007. SearchIgnite's research covered more than 53 million clicks across Google, Yahoo and MSN, with clients in the retail, travel, financial services and media industries, among others.



Meanwhile, reports from JP Morgan North America Equity Research and UBS have questioned the logic of using one month's worth of data as the harbinger of serious hard times for Google. "We note that comScore data is only one data point on search trends and that no conclusions should be drawn solely from this data set," wrote analyst Imran Khan, in the investment bank's latest Paid Click Trends report.

Ben Schachter, an analyst at UBS AG, echoed Khan's logic. "We hesitate to read too much into ComScore data in general and one month's release in particular," Schachter wrote. And while his firm still recommends the giant's stock as a buy, Schachter cut his sales forecast for Google by 1.1%, stating that UBS was "incrementally more cautious on our revenue growth estimates for Google sites."

It's that yellow caution flag that has investors and non-search types feeling antsy--and David Rodnitsky, vice president of strategy at, says that it's indicative of the disconnect between finance types and the search industry.

"The fact that alleged stock experts and the overall market in general is using this data to cut billions of dollars of market valuation off Google (or any other Internet stock, for that matter) is concerning," Rodnitsky wrote, in a post on Search Marketing Standard. "It basically shows that the general public really doesn't understand Internet advertising well enough to accurately determine an Internet company's worth."

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