Google Stock Is In Downward Spiral
I hadn’t been paying much attention to this lately but right around Christmas I was starting to notice that Google’s stock was in a bit of a slump. Like the rest of the world who watches this type of thing, I think I was amazed at how the Goog’s stock seemed completely immune to anything around it. And all the time I kept thinking how things were back in the late nineties when everyone said there was no tech bubble and then all of a sudden, the world (i.e. Silicon Valley) was flush with casualties.
It wasn’t like I was predicting anything (not that anyone would listen or that I even had a forum to blabber on at the time) but it just seemed that something had to give at some point. Unless I’m mistaken, I seem to remember hearing that blowhard stock “guru” Jim Cramer saying something like Google will become the next Berkshire Hathaway. Never split the stock and in years to come it will be worth thousands of dollars per share.
Well Jimbo may still be right but from the high of about $732 bucks per share in November I believe, Google’s stock has plunged. Yes that is the word folks, PLUNGED, to a new low of about $432 on March 6.
A 40% decline in 5 months? Holy Recession Batman! Let’s get real here: With the economy slumping (I’m not one to tout a recession), and business suffering doesn’t it make sense that people (i.e. business) will spend less on advertising? And since Google’s entire business model is based on advertising……well, you figure it out.
I have always wondered how a company could base it’s sole income stream on ONE item which for the most part Google has done. Their Adwords and Adsense models make them billions of dollars. But that’s all they have. Okay, okay, so you’re saying, “Yeah, well GM, Ford, Toyota et al only have one item as well, cars.” Yeah, but they have a lot of cars. When gas was cheap(er) and nobody gave a damn, SUV’s were huge moneymakers. The profit margins were huge on these gas guzzlers. When gas started rising, and the SUV sales took a dive, they ramped up the more fuel efficient smaller vehicles.
What does Goog have to prop it up? I wonder.
Look, I think what they’ve done is amazing. Hell, I use Adsense on every website I own so I’m not complaining. But a couple questions come to mind:
1 - If Google’s stock continues this downward trend, will they still be able to recruit the best and brightest with stock option promises?
2 - How does this effect the mindset of someone working at G who right now has options that are worthless?
I have no doubt Google will remain strong and Microsoft/Yahoo notwithstanding, probably the leader in search for the foreseeable future. But it is amazing to me how the recent past keeps getting forgotten time and time again.
Lost $335 Using Adwords Yesterday
Man I have to laugh at what happened to me yesterday. As some of you might know or others might not, there is a slick marketing ploy that is used by some internet marketers that involves PPC (pay per click), Google Trends, and a site that you own.
What’s done is this: You keep an eye on Google Trends. This is a great tool for seeing what the hottest searches on Google are. It is updated hourly I believe. So let’s say you see a really hot trend that’s moving up the charts. For example we’ll use the movie Cloverfield. The idea is to have a site or even a little blogger site set up with ads, cpa offers etc. You make the focus of this site (in this example) Cloverfield. You can have some auto generated stuff even.
You then go to your Google Adwords campaigns and create some adwords around Cloverfield. You make sure they get high enough to get some immediate traffic to your site.
The goal of course is to pay some money in those adwords clicks but the traffic to your site will convert to some sales.
Are ya with me?
So, yesterday I decided to try this tactic. I had absolutely no intention of making any real money. I just saw a hot trend, “volcanic” as Google calls it and slapped a blogger together.
The trend was Heath Ledger. The news had just come out that he’d died so I slapped a blogger blog together, put some ads on there and then went to my Adwords account and picked some keywords.
Once I did that, I picked my cost per click for each word and most importantly I chose my daily budget. I only wanted to see what kind of traffic I’d get so I chose a budget of $20
Cool.
About an hour later I checked my adwords account and saw zero clicks or impressions for any of my keywords. Hmm….interesting. Another hour went by and I checked again. Nothing.
Well, the day ran on and I got involved in my usual crap, i.e. trying to find something else to keep my money rolling in. At 4:30 I was wrapping things up and decided to check the adwords account.
I had about 15,000 impressions and about 860 clicks at a an average cost per click of .39 per click. My total cost out of pocket was about $335.00. That’s right…$335.00.
AARRHGHGGHH!!!! What the fuck!!?? I shut that thing down immediately.
So, here’s what I don’t understand and here’s what I learned.
1 - Why did Adsense allow my daily budget to get blown out to the tune of about 17 fold?
2 - Clearly the method can and does bring traffic. We saw that. What I didn’t do was create a site that was put together well enough so nothing really converted. Like I said, this was all done haphazardly and at the last minute. Of course, thinking I only had $20 to lose is why I did it. It was merely an exercise. No thought of making money.
Fortunately for me, my other earnings yesterday more than covered this loss but I do have to admit to being pretty pissed off about it. I would suggest you go for this but do it intelligently.