Wednesday, April 06, 2005

NEWS: Search-Ad Bubble Shows Resilience

By Kevin Kelleher TheStreet.com Senior Writer4/5/2005 5:55 PM EDT

As search giants Google and Yahoo! get ready to report earnings for the first quarter of 2005, a debate is growing over just how good -- or bad -- the environment has become for the glowing core of the nuclear reactor known as the Internet economy: search-related advertising.

Last year, the sponsored-link ads that appear on Google and Yahoo! search results, as well as a growing number of small-content sites such as blogs, generated growth at a rate that was faster than most areas of e-commerce. In the fourth quarter, sequential search-ad revenue grew 30% at Google and 16% at Yahoo!. But after eBay, one of the biggest buyers of sponsored-link ads, said it was dialing back on its search spending, concerns arose that a small search bubble was about to pop.



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