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Prakash S

very interesting analysis.

When I came to the part about google, funnily enough, it reminded me of Paul Graham's "What the Bubble got right", specifically about Yahoo in Para's 2 & 3.

http://www.paulgraham.com/bubble.html

Abhishek Gattani

Nice post!

It will be interesting to see how sites like shopping.com which rely primarily on SEM traffic from Google and operate on very low margins, will get affected.

Ravi

Very interesting... this is inline with Mary Meeker's analysis of Google actually benefiting from this recession.

Shouldn't display ads also benefit from this phenomenon? Perhaps more so than paid search ads? Display advertising is a better medium for brand marketers than paid search! And it is more measurable than print & TV ads. AOL's recent earnings don't seem to point to this, however:
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7b02224C5A-AE58-4C68-9889-5F0411AE4BC7%7d

Anand Rajaraman

@Ravi:

I believe the difference between search and display ads, and the reason why they behave differently in a recession, has to do with targeting. Search ads can be targeted much better than display ads, leading to better and more predictable ROI. Most of AOL's ad revenues are from Advertising.com, which is untargeted remnant inventory.

We're seeing the emergence of more targeted display ads, and those may well behave like search ads in a recessionary environment.

Andreas Ramos

All of this assumes that advertisers have optimized their campaigns. Or perhaps, it assumes they all have NOT optimized their campaigns. Two advertisers will get highly different results, depending on whether the campaign is optimized or not: an optimized campaign will 2X or 3X better, i.e., double or triple the results. In our experience, the large majority of campaigns are very poorly managed. The real problem isn't Giffen goods; the problem is that accts are literally handing too much money over to Google.

Innocent O.

Let's be honest with ourselves. The web is filled with more scams than legit opportunities. It's hard to find something that really does deliver what it promises. Some of the scam programs now call others scams, promising not to charge you any money. Then, at the end of the webpage, they are telling you to buy something from them. I have been looking for REAL paid survey site for a while now. I paid to join the top 5 I could find. I have to say that 3 of them were total crap. One was so-so, but it only had about 25 companies to work with. One of them was definitely head and shoulders above the others. It had everything it said it had, and it was easy to get started making money. Here it is: http://www.goldenpandaadbuilder.com/?ref=17885

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