Google succumbs to US slowdown

published 29 February 2008

"A highflier is losing altitude," said Miguel Helft in The New York Times. The world's largest search engine has already seen its revenue growth fall, from 92% in 2005 to 73% in 2006 and 56% last year. And Google shares, down nearly 40% from November's peak, slid 4.6% on Tuesday after researcher ComScore reported that paid clicks Google is paid when consumers click through an advertisement carried by the search giant ground to a halt in January.

They totalled 532 million, down 0.3% year-on-year, having slowed for the previous three months. "There are pretty strong signals now that the economic slowdown is having an impact on consumers' behaviour online" and thus hampering Google, said Stanford Group's Clayton Moran. Analysts have rushed to reduce their price targets.

The company's growth figures could now go into reverse as advertising enters a downswing: judging by the recent news from the consumer sector, "there seems little reason for optimism on either bricks or clicks".