| To: Gabriel008 who wrote (4) | 1/27/2006 1:56:09 PM | | From: Gabriel008 | | | | Andrew Goodman of Traffick;
It sounds like clicks convert better to revenues out of these top ("premium") spots, at least on popular mainstream terms, according to the Atlas Research studies.
So if commercial traffic is being better monetized AND it also converts better for advertisers, it would have been full steam ahead at a higher average revenue per page in Q4.
Countering that was an entirely different phenomenon, the introduction of a new Quality Scoring system to replace the old ad ranking formula. The result of this seems to be the removal of some lower priced clicks from the system (fewer ads showing on some queries). While this might have dampened revenues slightly, it seems inevitable that Google in Q4 will have significantly reversed the stagnating trend in average CPC's.
Overall revenues may be at or slightly below expectations, but profit margins should surpass expectations. Presumably, if you work for Yahoo, you don't manage a wide range of AdWords accounts. We do and I can't for the life of me see any reason to doubt that Google had a monster Q4. AdWords runs very efficiently compared to Y!SM. |
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| To: Gabriel008 who wrote (5) | 1/28/2006 2:00:10 PM | | From: Gabriel008 | | | | | I get the distinct impression that these SV tech guys don't understand marketing very well in terms of penetration/share/PV's etc. Penetration [i.e., reach] and PV's per user are mutually exclusive. We shall see on Tuesday after the close. I'm glad there's a healthy amount of skepticism. |
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| From: Gabriel008 | 1/30/2006 9:20:19 AM | | | | | | Google: Click fraud chaos - NY Post -Update-
According to the NY Post, Google's long-simmering click-fraud problem could explode into a billion-dollar headache for the Web giant, some Web marketing experts are warning. In fact, a growing number of Google-watchers claim the search giant is ignoring the click-fraud issue because it's so large. Click-fraud happens when surfers click on Goggle advertisers with no desire to get to the advertiser's site. Knowing Google charges advertisers based on how many surfers click on their ads, the fraudsters click on the ads simply to drive up the advertiser's costs. The fraud also falsely inflated Google's revenues. The estimates on the Street, if even close to being true, could rock the stock market darling, set to announce fourth-quarter results Tuesday. "If Google were to implement a method for stopping click fraud today, it would lose 30 percent of its revenue overnight," said Joseph Holcomb, a search marketing expert. Holcomb estimates that almost one-third of all clicks on Google's network are suspect, thanks to sophisticated software programs known as "click bots" or "hit bots" that mimic human activity and fool search engines into believing the clicks are legit. With Google set to report about $6 billion in annual revenue, Holcomb's estimate would put $2 billion in top-line revenue at risk. Google denies the problem is that large. |
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| To: Gabriel008 who wrote (10) | 1/31/2006 1:31:19 PM | | From: Gabriel008 | | | | GOOG will definitely need $2 to move up & $1.90 to $2 to stay flat.
From all the data that I've seen I believe GOOG will grow revenues app. 35% from Q3 [and this is up from my earlier estimate of 31%]. And, revenues net of TAC should fall in the $1.45b range. Now, anecdotal evidence points to at least a 30% increase in expenses [R&D, S&M & G&A] from Q3.
Net net - $2.07 to $2.11 - my best guess! |
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| From: Gabriel008 | 2/1/2006 3:02:18 PM | | | | | | Looking at the financial data from Q4 vs the Comscore & Alexa numbers this is what I get;
Financials: GOOG Web Sites +24%
Network Sites +18%
Total Revenue +21.6%
Comscore Click Trends GOOG Web Sites +22.4%
Network Sites +14.4%
Average +17.6%
Alexa Overall +18.9%
[variance of 200 basis points either way]
We’ll continue to keep an eye on Alexa and use it to approximate GOOG’s revenues. We know that GOOG sites is becoming more important & should reflect between 58%-60% of total revenues in Q1. If Internet Stock Blog posts Comscore Click Trends again we can also use these stats – although they show Network sites as app 60% of clicks, the reverse of the revenue picture.
Since GOOG sites is growing as a % of total revenue TAC should continue to go down – probably 32% in Q1 from 32.8% in Q4. Total cost of revenue should be in the 39% to 40% range. |
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