Google's Efforts to Reduce Accidental Clicks Could Cut Ad Revenues

SAN FRANCISCO -- Shares of Google(GOOG - Cramer's Take - Stockpickr) dipped on Tuesday after the Internet company disclosed that its near-term advertising revenues might feel some negative effects from its efforts to reduce accidental clicks.

In a filing with the Securities and Exchange Commission on Friday, Google said it was taking steps to improve the relevancy of ads on its Web sites by removing the ones that generated low click-through rates as well as those that sent users to irrelevant or low quality sites -- all of which is language that the company has used in prior filings.

But Google also added that it was trying to reduce the number of accidental clicks on its Web sites and that "these steps could negatively affect our near-term advertising revenues" -- language that is new to its filings.

Shares of the Mountain View, Calif., company were down 2.5%, or $13.29, to $516.35 in afternoon trading.

Google had previously reported in its fourth-quarter earnings release that its advertising revenue growth had been offset by a "quality improvement'' to content from the adoption of AdSense.

"This changed the clickable area around the text-based ads to only the title and URL, reducing the number of accidental clicks and increasing advertiser return on investment," chief financial officer George Reyes said in a conference call last month.

AdSense allows Web sites that are part of Google's network to deliver ads that are relevant to the search results or content on those pages. Google shares most of the revenue generated from the ads with the network's members.