in a recession advertising spend decreases , so i think it will affect google , but by how much i dont know.

A falling dollar will help overseas business have more purchasing power so this will help google in countries other than usa.

Depends on the depth of the recession - if it hits hard, and people *really* have less to spend, then Google and their affiliated publishers will suffer directly, and then indirectly as the advertising dollar falls away too.

I suspect this will affect some niches more than others. And some quicker than others.

Who'd be in real estate?

But I guess the guys in loan consolidation and the like will clean up :(

And it ain't just a US recession - it's catching on all over.

Mind you, we're not supposed to use the "R" word. Yet.

[edited by: Quadrille at 12:48 am (utc) on Jan. 16, 2008]

In the advertising business, recessions do affect spending, as anyone who's witnessed the bloodletting in advertising agencies during recessions can attest. (Ad gurus like to argue that a recession is a great time for aggressive companies to increase their spending and market share, but few advertisers are willing to accept the risks that go along with that strategy.)

The good news for Google is that online advertising is growing, while many types of offline advertising--such as newspaper advertising--are shrinking. It's possible that, instead of seeing a decline in ad revenues from a recession, Google would merely experience a slowdown in growth.

maybe online advertising revenue is increasing but so is the number of user's using the internet.

for example.

in first world countries the internet is highly developed.
In thrid world countries it is not.

However in 2007 number of clicks on this internet was 36 Billion ( six clicks per person world wide

2008? lets say 50 Billion .

my theory is this : more people are going to surf the internet and less people are going to buy . So cost per click is going to increase (due to more competition ) yet conversition ratio's are going to decrease maybe to 0.5% per 100 .

So advertising online is gonna get more difficult .

i think this is where there will be potential problems with the smaller companies throwing money away by advertising online.

Just a suggestion.

Regards

Malcolm

Google's had a cool $20-25B shaved off its market cap in the last couple weeks, so I'd say the recession has already affected Google. People are drawn to work at Google in no small part due to the possibility of options increases, but now there are 2000+ people whose options are underwater. They're gonna immediately become less loyal to the Plex, and many of the long-timers who've not yet found anything else to do will now take startup offers more seriously.

That's all indirect effects, though. In terms of direct effects I think we'll have to wait until April to see if Google's getting lower CPCs and/or CTRs.

-Shorebreak

I believe the recession will in fact affect Google and Google Adsense advertisers. As a canadian on both sides, Adsense and Adwords, Google was billing me in US for advertising. Now with the lowering of the US dollar, they are now charging us in Canadian.

We can all protect our Google Adsense revenues by creating more quality content webpages, increasing or even doubling our web traffic.

So, start doubling efforts from now to make it through the recession.
regards, osagie irowa

Update:

We are allowed to use the "R" word now, as George Soros "the man who broke the bank of England", has siad a recession is coming.

There's no doubt that money will get much tighter. But this time round, it will be the 'little man' that gets hit hardest, not the AOLs of this world.

Why? Because this time round, the big boys have deeper roots, while at the other end of the market, there's just too many people looking for a quick buck, where a slow buck will be a rarity.

Good for SEO in the short term, as people get desperate, bad in the medium term as the survivors call it (a) untrustworthy and unsafe and (b) a luxury they cannot afford.