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October 16, 2006

Do You Love Google? Punting Earnings ..

posted by MR WAVETHEORY at 10/16/2006 04:09:00 AM
Photo from Google Dance 2006
The NY Times has a great article about Google (Nasdaq GOOG) - Planet Google Wants You. It asks a very interesting question: Do you use Google because you love it or do you love Google because you use it? The answer according to one Professor:
People may think they use Google because they like it, but really, “it’s the reverse,” said Rashi Glazer, a business professor at the University of California, Berkeley, and a director of its Center for Marketing and Technology. “You use something and in seeing yourself using it, you say to yourself, ‘Hey, I’m using it all the time, must be because I’m loyal to it.’ It becomes a virtuous circle.”
Google is releasing earnings this week and Amr Awadallah writes about the changes that Google made to its home page and search results - Google (Nasdaq GOOG) Q3 Earnings are coming up this week - on Thursday. Earnings Consensus: $2.42 (Range of $2.18-2.65) Revenue Consensus: $1.81 billion (Range of $1.72-2.04 billion.) Google Q3 Changes have been geared to increase revenues. According to Amr,
  • Domain Searches:Previously when you searched on Google for a domain like “www.apple.com” you would get back a special page with just one web result for that domain and there was no ads what so ever on that page. Starting around first of Sept, when you search Google for a domain like search term you will get back a full fledged SERP with ads and the works. This will certainly create revenue growth for Google, probably in the low single digit range.
  • 8 East Only: For the very small percent of users whom customized the Google SERP to display more than 10-results, Google used to show a lot of east (right rail) ads since the page was very long (specially for those who customized to 100 algo results/page). But now Google only limits the east to just 8 ads regardless of your customization, this will probably have a non perceivable revenue impact.
  • Personalized North Sponsored:North Sponsored is the ad section above the algo web results, Google currently only shows 1, 2, or 3 ads in that section (and the remainder goes to east, i.e. the right side of the page). So far Google only decided on 1, 2, or 3 based on the query term, e.g. for a highly commercial query like “Car Insurance” you will see 3 ads in the north, but for a research type query like “Scheduling Algorithms” you will see 0 ads in the north. However, starting middle of September it looks like Google now also takes into account both the query and the user doing the query. If that user usually does not click on ads when s/he searches for that query then the north will have 0 ads, and if that user usually clicks a lot on north when s/he does that query then Google will show more north ads. Its not clear whether this change will be revenue positive or negative, I think it might be flat to down overall, but at same time it will provide a better user experience for their core users.

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