Google on Track for Solid Quarter
Douglas Anmuth, of Lehman Brothers, expects Google's paid-click and revenue growth to stabilize in the second quarter, maintaining that company is operating from a position of strength due in part to robust traffic, improvements on monetizing search and more disciplined expense controls.
Bidding on Brand Names
Among some of its search monetization improvements, Anmuth noted Google's revised trademark policy in the U.K., which now allows any advertiser to bid on brand-name search terms. Previously only the brand name owners could bid on the terms.
According to anecdotal evidence, Anmuth said, the change has already led to a spike in cost per click, or the amount of money that advertisers pay for clicks on its ads.
"Over time we would expect the spike in trademarked CPCs to normalize, but this change couple with continued search share gains and great overall adoption of search advertising in the U.K. could enable Google to shrug off macro factors and potentially even re-accelerate U.K. revenue growth," Anmuth said.Google has also expanded its beta version of automatic matching to a small group of users. The system helps extend the reach of an advertising campaign by automatically buying additional keywords that Google believes could help the advertiser. "While we believe the incremental contribution in the second quarter from Auto Matching will still be small, we view this initiative positively over time," Anmuth wrote. Also in the second quarter, Google will see a full quarter of revenue contribution from DoubleClick, for which it paid $3.2 billion.
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