Google to ComScore: You owe us $15-billion

Earlier this week, comScore released a report looking at Google’s click-through rates for January, which showed a precipitous decline — and that in turn caused a similar precipitous decline in the company’s share price, slicing about $15-billion or so worth of market value from the stock in a single day’s worth of trading. Now, the traffic-measuring company says that it has looked more closely at the report and come to the conclusion that the decline was the result of Google’s attempts to improve the quality of the ads that are generated when people do a search.

The slide in Google’s shares wasn’t all comScore’s fault, of course. In some ways, it was like the proverbial straw that broke the camel’s back. Investors have spent the past few months getting progressively more and more concerned about the U.S. economy and the effects of a recession on online advertising — and Google is the poster child for online advertising, since that makes up about 90 per cent of its revenues, and therefore justifies about 90 per cent of its multibillion-dollar valuation. All those fears were crystallized with the comScore report.

Still, it seems more than a little disingenuous for the company to be coming out with a fuller investigation of the click-traffic results after the horse has already stampeded from the barn, in a sense. Couldn’t comScore have seen this one coming? Given the nervousness around online ads, the news that click-through rates had fallen by 7 per cent in a single month was almost sure to set off a firestorm. It might have been nice to throw a few of those caveats in there at the time. Oh well — a billion here, a billion there. C’est la vie. I’m sure Google will get over it.

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