Problems for Search from the Finance-Based Economy? (AMZN, EELN, GOOG, RATE)

Media Buyer Planner reports that keyword prices "Tumbled 9% in August". Quote and analysis:

For the second month in a row, search engine keyword prices dropped, this time an average of 9 percent, to $1.50 in August from $1.65 in July, led by declines in the mortgage, telecom and consumer services categories, reports MediaPost (via MarketingVox), citing Fathom Online figures. Only the automotive category posted an increase, with the price of clicks rising 13 percent, from $1.49 to $1.68, the highest they have been since Fathom began keeping track in September 2004.

Mortage-related keywords fell to an average of $3.81 per click, down from April's high of $6.49. Average prices for telecom/broadband-related search terms dropped 13 percent, from $1.72 in July to $1.49, the lowest reported by Fathom. Telecom/wireless keywords declined 10 percent, to $1.03.

Consumer-services-related keyword prices fell 12 percent, from $1.12 to $0.99. Retail and investing keywords each fell 6 percent, and travel/hospitality keywords dropped 3 percent.

The Stalwart says:

It would be fascinating to get a revenue breakdown by keyword for Google (ticker: GOOG). Just as we're always shocked to find that bookstores are startlingly dependent on, say, the latest diet-fad book to hit their numbers, it could be that the search companies are heavily dependent on a few key terms to make a big chunk of their numbers. It makes sense. Mortgage related keywors are both very expensive and very popular. But the two won't always go hand in hand. Searches for the term "Blog" or "Hurricane" are bound to be common these days, but there's not a lot of money to be made in them, so keywork prices will remain cheap. These are big dips that don't auger well for the search engines, and possibly the economy as a whole.

Quick comments:

Problems for Bankrate? Bankrate.com (ticker: RATE) is probably the Internet stock with the most exposure to a cooling mortgage market, particularly because it has discussed moving to a pay-per-click advertising model. That's why Sy Jacobs is short the stock. Look also at E-LOAN (ticker: EELN).

Not just a search problem. When Amazon introduced its own branded credit card, I wrote:

The finance-based economy spreads to the Internet: Have you noticed the recent changes on Amazon.com? Amazon is now pushing its branded credit card so hard that if you haven’t yet signed up for one, every price is quoted before versus after the one-time rebate for signing up for the card. And once you have signed up, each quoted price then includes the number of rebate points you’ll earn if you pay with the card. Truth be told, the Amazon.com credit card is actually a good deal. But if even Amazon starts to make more money from finance than retailing, we’ll know the Internet industry is really messed up.

Related:

• The Finance-Based Economy Spreads to The Internet
• Bankrate's a Short, Says Sy Jacobs
• Bankrate Beats Consensus, Raises Guidance
• Bankrate Dicusses CPC Ads
• Ah! So This Is Why Shopping.com Is Entering The Financial Services Vertical
• All Internet Stock Blog articles on Bankrate, E-LOAN, Google
• The complete list of stocks covered by The Internet Stock Blog

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Comments

[microchip:]

For Daily trend of bids on 200+ keywords, including Home Loan related terms on Yahoo/Overture - Visit: www.hepguru.com/blog/2...

2005 Sep 27 10:00 PM