Summary:

Google’s (NSDQ: GOOG) growth rate and all that entails — click through rates, query growth, ad quality, etc. — continues to be the subject…

Google’s (NSDQ: GOOG) growth rate and all that entails — click through rates, query growth, ad quality, etc. — continues to be the subject of a lot of disagreement and debate. Q1 turned out solid, but there’s not going to be a letup in the key question facing the company: are its heady growth days done for? Speaking at the Goldman Sachs Ninth Annual Internet Conference, Nick Fox, Director of Business Product Management at Google tried to to pull back the thicket: “There are significant opportunities across the board. “He ticked off four drivers of revenue: query volume, ads per query, quality, price per lead, and noted for example that many queries still don’t have ads running against them: “A small portion of our queries have ads… we see that as a pretty significant opportunity.” The challenge is to convince advertisers that they could be making money by bidding on more keywords than they are. Other opportunities include helping companies improve the quality of their landing pages (so they get more value from their ads) and rethinking the ads that go next to each query. Fox’s example: Amazon.com (NSDQ: AMZN) ads for the book Harry Potter don’t generate many clickthroughs because searchers often are looking for something other than the book itself.

Social networks: “What I would say on social networks… the whole industry has been surprised at the difficulty of monetizing social networks.” “We found it more challenging than we expected it would be.” The difference: “On search you have this amazing thing: the query… on a social network, you don’t really know (what the user is looking for).” Other problems: users are doing a lot of non-commercial things on social networks (he mentioned throwing sheep and playing Scrabble). Those who are making money: “scummy things” like pyramid schemes and things that trick users into downloading ringtones.

Lots more after the jump

Mobile: “Mobile is much more similar to search than a social network is… mobile actually monetizes quite well.” New devices are key: iPhone users search at a rate of 50x normal users. Also, on mobile, there’s high volume on weekends and days when volume is low on desktop. So the mobile business complements the core business.

DoubleClick: Neal Mohan, Director of Product Management for Ad Serving Platforms, discussed how DoubleClick (Mohan came in via the acquisition) would complement the core business. The main goal: more choice. Through the integration, Google can help publishers figure out how best to monetize a page, whether it’s through text or display… though the primary focus is on bringing more monetization choices to publishers on the display side.

Microsoft’s (NSDQ: MSFT) cash back: Fox: “A lot of demand from advertisers to advertise on a CPA basis.” For consumers: “No plans to pay users to use our products… our fundamdental belief is that we should compete by building a great user experience…. that’s the focus, rather than paying users nickels and dimes.

User targeting: Not focused on building up profiles of users for better ad serving. But there are opportunities to improve yield by looking at query patterns. For example: If you search for ‘Italy Vacations’ and then search ‘weather’ you can improve yield on the latter search by taking into account the former.

Google’s apex: A questioner (representing investors) wanted to know about the talent issues and whether we’d seen Google’s corporate apex (arguably the biggest question there is): “We’ve seen extremely low turnover and churn in employees… they tend to get a lot of attention cause it’s Google.” Reality: level of churn is actually low. Mohan: No key DoubleClick employees have left.

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