Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Google's search slip is showing

Analysts lower their sales forecasts on the second month of slowing traffic and ad clicks.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Scott Moritz, Fortune writer

google_screen.03.jpg

(Fortune) -- New numbers point to more slowing in Google's search ad traffic - and analysts are adjusting their numbers down.

The troubling trend that first appeared in January continued last month, particularly in total search volume and in paid clicks, according to research released late Wednesday by research shop comScore.

The report says Google's February search traffic fell 4.6% below the January level and that paid clicks fell 3% for the same period. This is particularly bad news, since it confirms a trend that Google disputed last month and it also is the closest read on the pulse of Google's revenue rate.

If the comScore numbers are accurate, paid clicks are on track to be down more than 12% for the quarter.

As Piper Jaffray analyst Gene Munster points out in a report Thursday, the downward trend does not match the 8% sales growth rate Wall Street is looking for in the first quarter. Munster, along with Lehman Brothers' analysts, cut Google estimates Thursday on the basis of the report.

Piper now expects Google to report sales to be flat to up 5% over the fourth quarter, down from the 8% prior target. Lehman also cut its first-quarter estimate to about 6% citing weak consumer market and potentially lower advertising budgets.

The news knocked 3% off Google's (GOOG, Fortune 500) stock price early Thursday. The company's shares have fallen by a third so far this year.  To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
A White House press briefing as told by CNN's sketch artist The White House started banning cameras during some briefings, so CNN sent in sketch artist Bill Hennessy. More
The best gadgets for your next business trip Hotels often lack the resources business travelers need to work efficiently. But fear not: These six gadgets will turn any hotel room into a temporary office. More
Must-have gadgets for business travelers For many business travelers, commuting through airports and enduring flights is the worst part of any trip. Thankfully, these seven gadgets help make life on the road -- and in the air -- much easier. More

Sponsors