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GOOGLE - Showing Signs of being ... Under The Pump?

|Includes: LookSmart Group, Inc. (LKST)
Clearly, "the writing is on the wall" for Google.

Shortly after having a quick look at it's Q4 report it was so obvious that ... 'the times, they are a changing'. IMHO.
 
And not just for Google, but for the industry at large. I then immediately posted what was only a "tongue in cheek" note to Google [ Re: GOOGLE ], in the welcoming of them to their 'new' Boss.
 
These areas had initially caught my eye.
 
< Total Revenues - $6.67 billion (Q3 - $5.94 billion) - UP 8.9% Q/Q
 
Yet, revenues were DOWN by 1% for Google-owned sites that had generated revenues of $4.42 billion [$3.96 billion in Q3], or 66% [67% Q3], as a percentage of total revenues.
 
Revenues were UP by just 1% on Google’s partner sites, that had generated revenues through AdSense programs, of $2.04 billion [$1.80 billion in Q3], or. only a 1% rise to 31% [30% Q3], as a percentage of total revenues.
 
TAC - Traffic Acquisition Costs, the portion of revenues shared with Google’s partners is shown to have increased to $1.72 billion [ 84% of $2.04M - UP $160M  Q/Q], and compared to TAC of $1.48 billion in the fourth quarter of 2008.
 
TAC [Google advise] also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $250 million [UP $21M Q/Q], in the fourth quarter of 2009.>

Increased revenues for Google were not unexpected. But much of that increase could be attributed to it's DoubleClick Exchange, I believe. - That AdX has almost  stolen a march at this very early juncture (I feel) is reflected in the almost 9% Q/Q increase, in Q4.

This more fairer and efficient area of Ad Networks soon to be working through 'neutral' Exchanges in an RTB auction based marketplace (using Looksmart AdCenter technology) is set to change the "game" as Google once knew it. IMO. And at this early stage, it has hardly yet started.

From a recent report put out by Efficient Frontier ........

http://www.tmcnet.com/usubmit/2010/01/19/4579163.htm

........ the following represents some very interesting and what I believe to be most important findings for those others that are involved (like Looksmart and Yahoo), and even at this early stage:

<.... Google's share of [paid] clicks rose to 74.4% and reversed a downward trend in share since the launch of Bing. Yahoo! was the biggest loser in paid click share, giving up a full 3.4% since Q3 in moving from 24.4% to 21%.

Google's share of spend also rose, but at a slightly slower rate, moving up from 73.9% in Q3 to 74.5% in Q4...... While Yahoo! gave up significant share in clicks they lost only 0.5% in spend as a strengthening CPC at Yahoo! offset some of the click loss.>

This augers well for Yahoo's own earnings report, IMO.

The fact that Yahoo who gave up 4.3% in click share (in Q4) but lost only 0.05% in spend (and as a result of a strengthening CPC) is a direct reflection on it's RME (the Right Media Exchange) moving to the Premium level, for the Q4 period.

Looksmart's shareholders must remember that recently departed (dismissed?) CEO Ted West had previously advised of the fact that TAC (for Looksmart) had improved going out of Q3 and it was felt that this should remain sustainable during Q4.

And it was partly on West's above statement that I have based LOOK's traffic (for the full Q4 period - Alexa), as being of the Premium variety.

Whilst the 3 month traffic level to Looksmart (0.0102%) is shown as being down (by 5%) there is a need to take into account (and fully understand) the impact had by that spike (to 0.1%), as was had in the previous 3 month period.This (the spike) has distorted that Q/Q comparison, in a huge fashion. Traffic is UP.

In effect, Looksmart's traffic recorded for the Q4 period is up appreciably. And I believe strongly that it's all (of the better paying), premium kind.

For the AdVertise.com site [discover-facts.com] that I believe is managing the secondary marketplace (for Looksmart), it currently shows an increase of some 34% for the past 3 months. - This site (whilst having been proven to be registered with Looksmart AdCenter partner in ABCSearch, now AdVertise.com), may well even be now owned by Looksmart. It's possible. These 'rogues' can do anything.

At worst, it may have been 'loaned' to Looksmart for the purpose of separating the remnant or, the secondary Ad marketplace from that of the Premium Ad/Publisher network.

http://www.alexa.com/siteinfo/discover-facts.com# 

Now it's important to note when this site began to receive traffic. Note also that it had only all began prior to the start of Q4 2009, when (co-incidentally), Yahoo had also announced that it's RME (Right Media Exchange), was to concentrate on the Premium market.

There is nothing whatsoever that says that Yahoo can't have a 'replica' of it's RME to operate as that advertising exchange for the (Global) 'secondary' or, remnant marketplace.

Indeed, to achieve both separation and show transparency, in being at an 'arms length', Yahoo have appointed AdReady [ News ] as it's 'self-serve' platform.

It would very much appear to me that Yahoo's RME may well have been 'inter-connected' to Looksmart's small, but growing Global Network in mid August.

This 'spike' had in Traffic to it's AdCenter (circa 22nd September), I estimate to represent well above the 10 billion rate (and tested in "tandem" - linked on both sites) of impressions (daily), and that it was likely to be a (full on) "all-intest of the AdCenter technology's "inter-operability" capability, at scale.

Remember (also) that Looksmart has (in fact) advised the marketplace that during the Q2-2009 period, AdCenter had managed over 1 billion 'querries' (impressions) daily and had over 2 million paid clicks, daily.

Trailing 7 days Trailing 1 month Trailing 3 months Trailing 6 months Max

This [ Discover-Facts.com ] 'psuedo search site' above (besides, as suggested - is handling that AdCenter, secondary market traffic), even has what appears to be, a "generic" Privacy Policy to cover all or, at least many of the smaller sites that are 'partnered' within the network. And it's (Looksmart's?)own arse, of course. Fascinating!.
 
 
<..If you have arrived at this Privacy Policy by "clicking" on an authorized link from a Web Site, then this Privacy Policy applies to such Web Site, and the individual entity that owns and/or operates the particular Web Site from which you "clicked" to.
This Privacy Policy via an authorized link shall be referred to herein as "Sponsor," "we" or "us." Sponsor respects the privacy of its users, and this Privacy Policy explains what information we collect on our Web Site and how we use such information.>
 
Indeed, they advise intending Partners ....

< Own a website or search engine? Discover-Facts.com has access to thousands of advertisers sponsored into your feed to maximize revenue for the traffic you receive.> - http://www.discover-facts.com/partner.html 
 
 They certainly do. And the webmaster and 'designer' of or, for this Discover-Facts site [ spyka webmaster ] are ready, willing and able to assist SMB's to get started. Yes: We provide free web templates, WordPress themes, phpBB3 styles, Free CSS Templates and more!
 
All, only an opinion as always.
 
LC


Disclosure: Long LOOK