Jeffrey Lindsay, senior analyst at Sanford C. Bernstein & Co. who follows Google, stated today that there has been a “weakness in keyword pricing” at Google.
“”””Online advertising agencies and Google AdSense affiliates suggest that the primary causes for decreasing keyword pricing were lower paid search conversion rates that prompt advertisers to bid less for keywords; and cash flow and working capital constraints forcing advertisers to lower the amount spent on advertising. Brands thought that consumers would click on fewer ads because of the poor economy, but in fact people continue to click on as many ads as they did in a strong economy. Consumers click to compare prices. Since it takes more paid clicks to get a sale on some items, advertisers began bidding less on keywords. The number of clicks remains strong, It’s just taking longer to get a sale, so the amount they pay for a click has declined about 5% to 10%.”
Of course if advertisers pay less for keywood that should translate into even lower payments out to partners, including domainers.
Google’s will report earnings on Thursday after the market closes.
Thomson Reuters estimate that Google will earn $4.96 per share and $4.12 billion in revenue for the quarter.
Microsoft also reports Thursday.
