| 5:39 pm on Oct 18, 2008 (gmt 0)|
|And I suppose not one of them had that indespensable piece of equipment...the telex! I don't suppose telephones worked then either, nor were there televisions or newspapers? |
HuskyPup and jhood, if you do not understand the profound impact that China, India, and Russia have gained in just the past decade, not to mention the vast difference in the speed of communications and data and money transfer, I cannot take your opinions seriously.
Yes, it is very different this time, a pity some still live in the 1970's.
| 10:35 pm on Oct 19, 2008 (gmt 0)|
|HuskyPup and jhood, if you do not understand the profound impact that China, India, and Russia have gained in just the past decade, not to mention the vast difference in the speed of communications and data and money transfer, I cannot take your opinions seriously. |
Yes, it is very different this time, a pity some still live in the 1970's.
I don't think you're reading Husky's and Jhood's comments correctly. Husky knows well what's happening in China, India and Russia - he's got his business operating in practically every damn country! He definitely doesn't live in the 70's and I take his opinions seriously... you just gotta read between his wit. ;)
| 12:37 am on Oct 20, 2008 (gmt 0)|
Oh, I didn't know this was a comedy thread. He should express serious opinions if he wants my respect.
| 4:39 am on Oct 20, 2008 (gmt 0)|
|He should express serious opinions if he wants my respect. |
You would be well advised to lighten up. Husky, JGood, and andrewshim were making good observatons. The sarcastic "comedy thread" comment was out of line.
| 7:32 am on Oct 20, 2008 (gmt 0)|
|Husky, JGood, and andrewshim were making good observatons. |
These observations were themselves either sarcasm or hopelessly naive. These irrational attacks on me are unwarranted, this whole kerfuffle will probably be deleted anyway.
I stand by my original statements, though this thread probably doesn't deserve my attention.
| 9:24 am on Oct 20, 2008 (gmt 0)|
I am in the so called recession proof sector/ niche ( as per Netmeg's post).
AdSense is way way up.. and going through the roof.. Haven't had it so good in the last 2 years..
On the other hand , affiliate earnings are in the dumps ..can't understand why.. Maybe it is the US economy.. On balance I am way way up..
| 9:27 am on Oct 20, 2008 (gmt 0)|
OnlyToday: I read and re-read the last part of the thread, and I still could not find anything to be upset about. I think HuskyPup's and jgood's remarks where on-topic and were not an attack on you.
In fact, we as humans have no ability (desite all the efforts and wishes) to look into the future. The only remotely reliable prediction can be made from past experiences (aka "learning"). There were recessions in the past, and maybe we can draw some conclusions from them?
What is the direct impact from the economical crisis on Google, on Adwords & Adsense, and specifically on Adsense publishers? These are the questions at hand.
1) Impact on Google
So far, Google has withstood the crisis. However, their Q3 earnings did not include the period where the disaster became more visible (Q4). Word has it that US consumers are not going to spend a lot money this holiday season (no surprise here). Marketing departments will cut back on useless marketing spendings and shift budgets into more efficient marketing tools (i.e. from print/TV towards online). Google probably will see improved revenues from this change. BUT as inflation will rise, this growth will only happen virtually, i.e. Google MAY be devalued when looked at from the outside world.
2) Impact on Adsense
Same as before. A portion of the shifted marketing spendings will also affect Adsense, i.e. the overall revenue from content network will rise. This is also supported by the assumption that publishers are trying to squeeze out every Cent from their pages, so they will increase the Google ad inventory (more ads, AND more publishers).
3) Impact on publishers
As content network does not contribute the same margin % to the profit, Google will continue to put efforts into their own property (search, maps, gmail, Youtube, etc.) instead of beefing up the Adsense product. So I do not expect a big rush to introduce new tools, filters, products for publishers.
Google's overall revenue in USD may rise, but if inflation devalues the US Dollar, then absolute payouts to publishers outside the U.S. will continue to shrink.
With competition on the rise (more ads, more publishers), individual publishers may see the same or decreasing revenues.
| 2:33 pm on Oct 20, 2008 (gmt 0)|
Being too optimistic has already been costly for me during this crisis, but not in the AdSense corner. That has been the brightest spot weathering the storm better than everything else. But my over-optimism has been due to an underestimation of the magnitude of the opacity in the securitized mortgage market and has absolutely nothing to do with anything that happened in the 1970's.
The recession that followed the S&L crisis in '88 is a better model than anything that happened in the 1970's. The losses were not as nearly great or prolonged as this sub-prime mess but things also moved much more slowly because the Soviet Union was fully in turmoil, and China and India were not yet significant economic factors.
I know that many with very impressive economic chops are calling for a longer recession and that my continued optimism is a bit contrarian. Maybe it's because AdSense remains a bright point in my income stream and does seem to be performing counter-cyclically. But I also credit a faith in the current state of our more advanced technology and the potential now provided by the more advanced economies around the world, i.e. Brazil, Russia, India, China, et. al. as compared with '90-'93.
Contextual advertising will continue to outperform traditional print and broadcast and for that reason will perform counter-cyclically though a prolonged recession will eventually depress even that IMHO.
Concluding, I maintain my contrarian opinion that the recession will be shorter than most predict.
[edited by: OnlyToday at 2:40 pm (utc) on Oct. 20, 2008]
[edited by: martinibuster at 11:18 pm (utc) on Oct. 21, 2008]
[edit reason] See TOS. [/edit]
| 3:03 pm on Oct 20, 2008 (gmt 0)|
|As content network does not contribute the same margin % to the profit, Google will continue to put efforts into their own property (search, maps, gmail, Youtube, etc.) instead of beefing up the Adsense product. |
Google will continue to invest in building revenues from its own properties and from AdSense--and from Doubleclick too, for that matter. Google is a big company, and it can easily afford to invest in refining largely automated, highly scalable products like AdSense that can increase Google's penetration into the larger advertising marketplace.
| 4:08 pm on Oct 20, 2008 (gmt 0)|
My clicks are about the same. As a UK publisher, the key benefit to me is the fact that the Dollar is strengthening against the Pound. This means that my revenues are increasing.
It's an ill wind that doesn't blow anybody any good! ;)
| 7:30 pm on Oct 20, 2008 (gmt 0)|
I'm UK too, and the £ is going to fall further is my guess, I'm enjoying it now and expect even more in the next few months. The British politicians are far more accurate than than Americans when it comes to shooting themslves in the foot.
| 6:05 am on Oct 21, 2008 (gmt 0)|
During this crisis, Europeans may be glad to get some dollar earnings. Although if you target the EU and you get EU advertisers then it probaly does not matter much as you and the advertiser are calculating in EUR. But if you get revenue from the US and the EU, then you may sleep better.
| 6:26 am on Oct 21, 2008 (gmt 0)|
My earnings are steady. The last 12 months have been my best to date (but then, the trend has been upward since I started using Adsense, since I'm constantly adding new content and working on getting links).
| 5:43 pm on Oct 21, 2008 (gmt 0)|
With many companies cutting back on their ad spending to conserve capital, there had been some expectation the results would be impaired. Turns out, so far, search advertising has remained resilient. One explanatory theory, particularly emphasized moving forward, is that cost conscious customers are increasingly using the Internet to seek bargains. Search being a key part of that process, the ad dollars are flowing to it, in part, in the equivalent of a “flight to quality.”
| 7:49 pm on Oct 21, 2008 (gmt 0)|
Since I correctly predicted this "crisis" a year ago (those who know me will know that is true and not just horn-tooting... I publish a daily blog on money and finance), I thought I might dispel some myths and amplify some other ideas.
Myth: We are heading into a prolonged 1930s-style depression. Absolutely untrue. In the 1930s there was no social security, unemployment insurance, welfare, or many other market controls (there also wasn't a multi-trillion $$ derivatives market, either ;-).
Today, 50 million Americans get some form of Social Security. That's about 1/6th of the total population. That alone will save us from depression, and even from a long recession.
Myth: The problems on Wall Street will affect Main Street. This hasn't been the case at all. Corporate earnings are still pretty strong, outside the financial sector. It may happen later on, but it isn't like we are falling off a cliff.
Myth: Inflation is killing us. Nothing could be further from the truth. All commosity prices are falling and will continue to do so as consumers become a little more cost-conscious and frugal. Lower prices for everything will eventually be the norm. The lower price of gas and heating fuels is like a tax cut. The lower prices won't hurt most finished goods manufacturers as they will be able to maintain profit margins due to lower raw material prices. In general, this is a good thing in the US. Prices are coming down to satisfy the slack demand caused by 8 years of slow or no wage growth. I'll be back later. Have to go kill a squirell right now.
| 9:25 pm on Oct 21, 2008 (gmt 0)|
The US dollar is now worth GBP£0.60 - let's hope it stays that way until the end of the month.
| 10:25 pm on Oct 21, 2008 (gmt 0)|
|Myth: Inflation is killing us. Nothing could be further from the truth. All commosity prices are falling and will continue to do so... |
True for now. But once we are in a recovery mode pent up demand will combine with the need to reconcile 1.8 trillion (so far) in "bailouts" and will they possibly be able to resist cranking up the printing presses? Actually, since the "bailouts" are virtual money anyway it is only recessionary pressures and the unknown valuation of the CDO's that are keeping inflation at bay. fearlessrick if I am overlooking the effect of a few trillion here and a few trillion there, please tell me how. When the real value of the so-called toxic-paper comes to light and housing actually does bottom we may well be on a slingshot to inflation.
fearlessrick I agree completely with your other mythbusters.
[edited by: martinibuster at 11:05 pm (utc) on Oct. 21, 2008]
[edit reason] political comments. [/edit]
| 12:17 am on Oct 22, 2008 (gmt 0)|
OnlyToday, I won't even try to answer what effect the trillions pumped into the banking system worldwide will have in months ahead. Your argument that it is inflationary surely must be considered. (The money has to go somewhere, but when, and where, are questions far beyond my limited knowledge.)
My advice, for what it's worth, is to prepare for Armageddon and a complete, total, all-encompassing economic collapse, while maintaining a positive business posture.
That's a tough act, but my point is that I may have at first, overestimated the severity of the problems, and now am underestimating them. I have to admit, that once my doomsday scenario - which I called in late 2007 in various posts - began to occur with rapidity in September and October 2008, I was afraid of being all too correct and I reassessed. But, just tonight, after watching a segment on PBS with the brilliant Nassim Nicholas Taleb, author of "The Black Rose", I have to defer to his insight... and he's not sure what's going to happen.
Ergo, my aforementioned advice.
Truth of the matter is that companies, families and individuals carrying heavy amounts of debt are going to be crunched, and crunched hard. With declining asset values all around (something of which I am certain is occurring) those with excessive debt loads will be unable to attract fresh capital. For companies, it means severe downsizing and potential liquidation. For families and individuals, it means inability to sell their homes, finance improvements or improve their standards of living.
Thank your lucky stars every day that you are in the internet business. It is truly a "new economy" and may outlast and outperform traditional commerce.
I could go on for days on this topic, but I'll cut it here.
| 1:10 am on Oct 22, 2008 (gmt 0)|
|...prepare for Armageddon and a complete, total, all-encompassing economic collapse... |
I really didn't want to hear that I should hoard guns and gold, but I suppose it's wiser than business as usual. For now I'll stick with laying in stocks of non-perishable staples. I just bought my family and myself a three year supply of outdoor shoes for example. It's hard to imagine how these kinds of savings could fail to pay off whether the future be inflationary or depressed.
Internet businesses are indeed counter-cyclical and extremely green when it comes to performing energy intensive tasks. We are the lucky ones.
| 5:13 am on Oct 22, 2008 (gmt 0)|
Are internet businesses really counter-cyclical? Is there any evidence of this in the short life of the internet?
Isn't the line of bsuiness more important than the sales channel? If I was in property / real estate at the moment, I can't see that being in the internet side of it would make me any more happy. It's bad news all round in the property market.
If I'm in some business which will thrive in a recession, then yes, I may make more money using the internet but I can still survive without it.
| 5:38 am on Oct 22, 2008 (gmt 0)|
The Internet has made businesses much more efficient. Where would we be without emails? Where without shopping comparison? Where without Google News? Google Maps?
Internet and digitalization have caused substantial changes in the economy. If one thing can be said, the Internet will continue to do so. If economy is weak, companies (and private households) will make EVEN MORE use of the Internet to seek higher efficiency.
This will also be true for advertising markets. Next to go are "traditional" advertising channels, like newspapers, magazines, and TV. (Niche publications will still be able to draw in advertisers as they are targeted better and have a higher efficiency than mass media.) These already start to see the problems. In 2009, things will be much worse.
Anyway, I believe Google and their Adsense program will continue to be an important market player; while I do not hope for higher earnings, I do not expect the earnings to drop significantly (i.e. more than 30%) either. Just don't count on it.
| 6:27 am on Oct 22, 2008 (gmt 0)|
|Are internet businesses really counter-cyclical? |
Absolutely. Viewing foreclosed properties in an automobile would be prohibitive. If you're already insolvent then that is a moot point, but in any line of business where driving or flying to a location used to be a part of the deal a website can save the day.
| 2:18 pm on Oct 22, 2008 (gmt 0)|
|Are internet businesses really counter-cyclical? |
Probably not, in most cases. But whether Internet businesses are "counter-cyclical" may be beside the point. What matters is that, at this point in time, Internet advertising tends to be quite a bit cheaper than traditional media, and for some types of advertising (e.g., direct-response text ads) it's easier to measure ROI and make adjustments in almost-real time. In sectors where ad budgets are already migrating from traditional media to the Web, a soft economy may accelerate that migration, so that Internet businesses are affected less by shrinking ad budgets than traditional media are.
Still, not all Internet businesses will benefit equally from greater selectivity in advertising expenditures (as anyone who's been following the travails of Yahoo! and newspaper Web sites can attest).
| 3:27 pm on Oct 22, 2008 (gmt 0)|
|But whether Internet businesses are "counter-cyclical" may be beside the point. |
I stand by my contention that Internet business is counter-cyclical, though if the underlying product or service is very cyclical or even mildly cyclical then the effect is offset.
Strictly within the realm of advertising I would say that contextual targeted Internet ads are proving to be counter-cyclical during this crisis.
And no matter where we are in the business cycle individual management skills, happenstance and the vagaries of the marketplace still apply. Ditech is still advertising mortgage loans after all.
| 4:20 pm on Oct 22, 2008 (gmt 0)|
|Strictly within the realm of advertising I would say that contextual targeted Internet ads are proving to be counter-cyclical during this crisis. |
Depends where you sit. I'm seeing much higher eCPMS/CPMs from display ads than I am from AdSense. The former are on the increase; the latter have slipped a bit because of lower clickthrough rates.
| 4:48 pm on Oct 22, 2008 (gmt 0)|
Fair enough. Where I sit (a product line that usually does well in Malls and on 5th Ave. Rodeo Dr. etc.) contextual advertising is quite counter-cyclical. YMMV
| 1:19 pm on Nov 13, 2008 (gmt 0)|
|Myth: The problems on Wall Street will affect Main Street. This hasn't been the case at all. Corporate earnings are still pretty strong, outside the financial sector. It may happen later on, but it isn't like we are falling off a cliff. |
Things change. Iceberg errr... cliff dead ahead. Main Street is in it now with both feet just like Wall Street. IMHO My AdSense earnings are holding up for now but I suspect that's the retailers trying to save Christmas.
[edited by: OnlyToday at 1:20 pm (utc) on Nov. 13, 2008]
| 1:33 pm on Nov 14, 2008 (gmt 0)|
I am sure in two years things will settle down and most economies will rebound.
What happens now is the same what happened in the 97/98 Asian financial crisis. The real-estate bubble in Thailand blow up and once the Thai Baht crashed it had a snowball effect. Million's of people's lost their job throughout Asia (me included), the small companies went bust, the assets (NPL - None Performing loans) were acutioned for 30 cent on the dollar and Asian banks learned from their past mistakes and no banks and companies were bailed out compared to now in the Western countries.
Does it impact me? Not at all.
My numbers with Google has always been stable by adding qualty content and diversify. Google still only pulls 20% of my profits.
| 2:22 pm on Nov 14, 2008 (gmt 0)|
|...and no banks and companies were bailed out compared to now in the Western countries. |
That is a huge difference and creates what is known as a moral hazard. The people who actually caused the problem will not suffer and will have no reason to consider their bad acts a mistake.
There is profound corruption throughout the system in both political parties which is why none of the scoundrels are being punished or even singled out as culprits. In fact they are being rewarded with billions of dollars.
Those who caused the crisis are in the best position to profit from it. Only those who knew how bad the banks were in trouble had the nerve to short them (Goldman Sachs et al) and make billions more from the suffering of others.
So it's unlikely this will clear up in a mere two years as in Asia, the new US administration has many ties to the scandal and will thus not pursue the actual guilty parties but will try to blame others (guess who) and act the savior.
It may benefit online advertising, but the benefits will be uneven.
[edited by: OnlyToday at 2:25 pm (utc) on Nov. 14, 2008]
| 6:29 pm on Nov 14, 2008 (gmt 0)|
I am glad you wrote that since if it had been me I would probably have been banned from WebmasterWorld for the quantity of expletives I feel about these "people"...and no, I'm not in negative equity and I've lost no money in this debacle, I've been trying to get Joe Public to comprehend what has been going on since the dot.com bust however so very few would listen.
Well written, thank you.
| 1:13 pm on Nov 15, 2008 (gmt 0)|
You make a good point.
The banks and companies in Asia could not be bailed out because IMF forced them to sell the NPL by way of auction otherwise they would not get the money from the IMF pot.
Most of the western companies that bid for the NPL assets was Lehman Brothers, AIG and Goldman Sachs and some other US banks and they made a fortune BUT NOW THE TIDE HAS CHANGED.
I do hope that America and Europe will recover but it will take time.
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