Google Gives Financial Forecasts: AdSense Worthless


After Google's first less-than-stellar quarter Google accidentally gave their 2006 financial forecast. The WSJ reports:

Google Inc. said Tuesday it accidentally disclosed internal financial projections on its investor-relations Web site, but said some of the figures are unreliable and shouldn't be considered current guidance.

In a filing with the Securities and Exchange Commission, Google said the statements included a forecast for $9.5 billion in 2006 advertising revenue and the disclosure that the company's AdSense margins "will be squeezed in 2006 and beyond."

The comment about AdSense margins being that about pending competition? More aggressive smart pricing? Click fraud related issues? Legal liabilities associated with funding content theft? Increased costs associated with funding some content quality standards?

It only took Google 1 bad quarter to leak the information they vowed to never give. They have been giving so much financial misdirection recently that their talks on the topic sound like a politician running for office.



Your guess are as good as mine. I would go with a good combination of all of the above.

My guess

My guess is that it is due to competition. Up until now, Google has had the luxury of really having no competition in the space. When Yahoo tweaks things and MSN enters the arena, all sides will be fighting for publishers. You can't tell me that these companies won't pony up more to get those publishers.

It's Many Things

1. Yahoo getting serious about content (Yahoo Performance Network);
2. Amazon getting into content;
3. Click fraud;
4. Click price efficiency;
5. Disintermediation by publishers.

My thoughts, in more detail!, available here:

it's amazingly easy to start

it's amazingly easy to start up an adsense competitor using Google's existing client base. You just crawl the web and anywhere you see adsense you also see the advertiser. It doesn't take a large IQ to realise all the necessary info is out there in the public domain.

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