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My 2 featured articles for the week ending Apr. 21, 2006:

Archived blogs for the week of April 17, 2006

1152 - April 21, 2006 - 10.49 AM EST

Google reports strong first-quarter earnings

Google reports first-quarter sales and earnings that are substantially higher than Wall Street's estimates.

Shares of Google increased nearly 6 percent in extended-hours trading, according to Inet. The stock had moved up 1.1 percent in regular trading on the Nasdaq Thursday.

Google's strong first quarter results are the latest indication of just how strong the online advertising market is. Yahoo! (Research), Google's top rival, reported strong first-quarter sales and earnings on Tuesday.

Both companies are benefiting from robust demand for ads tied to specific keyword search queries but Google depends almost entirely on this market for its sales and profits.

Revenues for Google were $2.25 billion, up 79 percent from a year earlier. Excluding traffic acquisition costs (or TAC) that the company shares with advertising partners, Google reported sales of $1.53 billion, ahead of the $1.44 billion that Wall Street analysts were expecting.

"We're obviously very happy with the company's first-quarter results," said Google chief executive officer Eric Schmidt during a conference call with analysts Thursday. "We basically have good news across the business. It looks like to us that we have continued to gain market share."

Posted on Businessblog™

1151 - April 20, 2006 - 10.27 AM EST

Click fraud less of a problem now?

According to a new report, the average rate of click fraud is less than 14 percent, when compared to original estimates of 20 to 35 percent as suggested in the past.

The Click Fraud Index shows that the industry-wide average click fraud rate is at 13.7 percent on average.

In fact, the data show that the overall click fraud rate at top-tier search engines such as Google and Yahoo is even lower, at 12.1 percent.

The rate increases to 21.3 percent at so-called Tier 2 search providers and 29.8 percent at Tier 3 search companies, according to the Index.

The Click Fraud Index monitors and reports on data collected by the Click Fraud Network, a free service advertisers can use to track their online ad campaigns.

Click Forensics, which hosts the service, also sells pay-per-click validation services and licenses technology to advertisers.

Posted on Businessblog™

1150 - April 19, 2006 - 8.02 AM EST

Yahoo releases first-quarter earnings

Yahoo earned $160 million, or 11 cents a share for its first quarter ended March 31. That's down from the year-ago $204 million, or 14 cents a share.

So-called net revenue, excluding the fees that Yahoo shares with its advertising partners, rose to $1.09 billion from $821 million a year earlier.

Analysts surveyed by Thomson Financial were expecting the company to post an 11-cent-a-share profit on net revenue of $1.08 billion.

Yahoo also guided to a second-quarter top line of $1.08 billion to $1.16 billion, and a full-year net revenue line of $4.6 billion to $4.85 billion. Those figures are in line with the Thomson Financial targets.

"The expectations going into the quarter weren't very high," says Martin Pyykkonen, an analyst with Hoefer & Arnett, who rates Yahoo shares a strong buy with a $45 target. "Overall, it was an in-line quarter with in-line guidance."

Gross revenue rose 34% from a year ago to $1.57 billion, with marketing services revenue rising 35% to $1.38 billion and fees revenue adding 25% to $186 million.

Operating income dropped 19% from a year ago to $201 million, as stock compensation expense surged to $109 million from $9 million a year earlier.

Operating income before depreciation and amortization rose 26% from a year ago to $435 million, while free cash flow rose 8% from a year ago to $343 million.

Posted on Businessblog™

1149 - April 18, 2006 - 8.56 AM EST

Social search with MSN

MSN is planning to launch the MSN social search service that will compete with Yahoo’s MyWeb.

"Microsoft plans to unveil a question-and-answer social-search tool in the coming months" says Justin Osmer, senior product manager for MSN.

"The feature will let users direct questions to a specific universe, such as a group of friends, rather than to get automated lists of results from a generic search engine.”

In the article MSN’s Osmer also adds that Microsoft research has shown that generic search can’t answer 50 percent of the inquiries asked, and that the new MSN Social Search will be “one of the larger projects” for MSN Search.

The article also states that Microsoft is in talks to purchase Eureka, which is a social search pioneer that launched their product way ahead of its time.

“Eurekster essentially combines generic search, though a partnership with Yahoo, with information culled from social-networking sites, such as Friendster.com.

Thanks to Eurekster’s technology, a Friendster user searching for “skin care” would get results that reflect reviews and preferences of a predefined group, be it friends, neighbors, or another affinity group — say pregnant women.“

Posted on Businessblog™

1148 - April 17, 2006 - 3.12 PM EST

Average click cost set at $1.39 for Q1 2006

The average cost-per-click estimates for the first quarter of 2006 are in. According to the Fathom Online Keyword Price Index, for the first three months of 2006, the average cost to advertisers that bid for keywords on PPC search engines dropped 3 percentage points to $1.39 from a previous cost of $1.43 per click at the end of last year.

Fathom Online has tracked keyword prices consistently for the past 19 months and significantly expanded the Index this year. Following on the Q4 2005 holiday season, the drop in bids was not surprising given the seasonal nature of advertising.

Overall, the average bid has increased 1.4 percent since the September 2004 inception of the KPI when the average bid was $1.37. Although prices often vary dramatically day to day, average bid prices have settled in to a predictable range.

“Search marketing is growing at a robust 25 percent this year, and price stability helps that growth” said Matt McMahon, VP Marketing Services at Fathom. “As advertisers see a more predictable keyword bidding environment, confidence in the channel grows and advertisers continue to invest further in search marketing.”

Posted on Businessblog™

Copyright © Serge Thibodeau 2006. All rights reserved.

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