Is There a Connection Between Internet Advertising and the Economy?

With Google (GOOG) and Yahoo (YHOO) in the earnings cross-hairs, everyone is asking about the connection between advertising spending and the changes in the broader economy. Anyone who says there is no connection -- and there are those who makes that case -- have their work cut out for them.

Comments

[User 142738:]

Advertisers will still buy placements, but the subject will change. Two years ago, the big advertisers were selling shady mortgages. One year ago, they were selling boiler room stocks from China. They're now selling shady gold stocks. Next year, who knows?

2008 Jan 28 02:58 PM

[fedup:]

Of course internet advertising has affected our economy adversely, but it may be less obvious than sub-prime mortgage predators unleashed on behavior monitored Yahoo network patrons. It may be that this great new medium undercut and outmaneuvered traditional parallel markets, mercilessly leaving them crushed or crippled. Online advertising offered businesses a chance to place their ads where people wanted to be, but weren't available elsewhere, like sponsoring illegal software, music and videos, or most popularly, pornography. This new ability to go where other couldn't (and wouldn't anyway) destroyed the newspaper industry and has hobbled most other traditional advertising platforms. The direct effect this has had on our economy is truly immeasurable, but the main old money network of business base has undoubtedly suffered. When that kind of thing happens, everybody loses. Expect for some slick venture capitalists in silicon valley that are laughing all the way from the bank to the bahamas. People think the internet had some great things to offer, and it actually does, but that won't happen unless the volatile wild west mentality there subsides. Until then, get ready for plenty more bubble-filled bouncy rides for everyone. That includes all our 401K retirement funds, which are being invested in that unsustainable misadventure.

2008 Jan 28 03:39 PM

[Ben Around:]

I think we will be surprised by the increase in internet activity during this slow-down. Not calling it a recession yet. It has been my experience that when people don't have funds to go out, buy gas, dinner out or drinks they stay home and play with the computers. Check out sales, look at eBay visit defferent websites.

The internet is the new past time. I think goog will offer an earnings surprise. I am not sure about yhoo because they are changing their models and sales tools.

Long on goog.

2008 Jan 28 04:29 PM

[Hugo van de...:]

You're right, if people feel they have less money to spend they will stay indoors more often. They might still buy a new computer or iPod, because that seems a better investment than a tank of gas or a take away meal.

2008 Jan 29 03:02 PM