Wednesday, February 27, 2008


Why It’s Good News If Google Is Vulnerable To A Recession
by Scott Karp

Any business that operates based on cyclical inputs — i.e. consumer spending and ad spending — that appears immune to cyclicality is defying the laws of economic gravity. And when gravity kicks in, it’s not like water rolling down a hill — it’s like Wile E. Coyote realizing there’s no more cliff underneath him.

If Google’s paid search business turns down when consumers and businesses spend less, it makes it far more likely that these consumers and businesses are making rational decisions about paid search advertising — that there is real value there.

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