Google Shares Drops Over Ad Revenue Worries
By Christopher Nickson
February 28, 2008
A decline in ad click through in searches has led to a decline in the valuation of Google shares.
Is the boom time over for Google? It might be, as a report from research firm comScore has shown a decline of seven per cent in ads viewed on Google during January over the same month in 2006. That came even as searches increased by 10%.
As a result, there’s been a sell-off of Google shares, leading to a fall in value of eight per cent, and analysts have cut their 12-month target on the company. ZDNet reports that in the case of UBS, that figure has gone down from $650 to $590. The stock has fallen by 35% so far this year.
What remains to be seen is whether this will all translate into a drop in the purchasing on online ads, although it should be noted that comScore has changed the method it uses for website visitors, meaning that the data might not be truly reflective.
Then again, it could prompt memories of the dot-com bubble bursting.