ComScore backtracks on numbers that tanked Google's shares
Bear Stearns analyst Bob Peck laid waste to stock portfolios everywhere on Tuesday with ComScore metrics that said Google users clicked on only as many paid links in January 2008 as they clicked on in January 2007. On the news, Google's share price dropped 8 percent. ComScore's Magid Abraham and James Lamberti are sorry. To say so, they wrote a 1,152-word post. Here's a Friday-friendly version:
ComScore's report triggered reactions in the financial community on two concerns: a weak outlook for Google, and a soft U.S. economy. Our search data does not lend them direct support. Softness in Google's paid click metrics is a result of Google's quality initiatives. That resulted in a reduction of paid listings and the opportunity for paid clicks to occur. Reduction of paid listings existed throughout 2007 and was offset by improved revenue per click. Indicators point to the company continuing to do well. If this improved quality is real, should we expect an increase in the paid click rates? Not necessarily. If ads are more relevant, consumers need fewer clicks.
One-word version? "Oops."