Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
Forget about the fact that Google’s revenue-per-click dropped 7 percent in the first quarter of this year. That’s all going to change, says Sanford Bernstein analyst Jeff Lindsay. In a report, he says the company’s revenue per click will rocket back and be growing at a 15-percent clip by the beginning of 2010. Part of that turnaround will be thanks to a rebound in the economy starting in the fourth quarter of this year, he says, But also, Google’s search advertising is sold in a real-time auction, which means it should recover before display advertising, which is typically sold by salespeople who negotiate ad contracts four to six weeks before the ads are placed on a publisher’s site.
Weak ad rates drove industry revenue-per-click down 6 percent in the first quarter of this year, which surprised many people in the business since marketers typically turn to performance-based advertising like search (versus branding advertising like display) during periods of economic weakness.
Lindsay said the reversal in revenue per click could make Google (NSDQ: GOOG) worth nearly $200 billion a year from now, up from $125 billion now.