Nothing says "recession" like a bit of a dip in the rate of growth of Google's profits, which is what we saw this week. The search engine company has built up such a mythical presence in the minds of the old media, most spend their evenings behind the sofa shivering with primal fear, waiting to be disaggregated by the jolly primary coloured beast. But there are a couple of things to remember - Google's results this quarter represented a slowing in the rate of growth rather than a full-throttle reversal of fortune, and it were slightly impaired by the effect of interest payments on its purchase of DoubleClick's online advertising business. At more or less the same time as spotty youths on Wall Street were signalling sell on Google, Microsoft (which also took a bit of a market battering last week) was waving the worried flag over Google's potential dominance of a search advertising market. The irony of the situation is acute.

And if proof were needed that Google is not in trouble, it came last Friday when the US research company Efficient Frontier put out a report saying that Google took 77.4% of all search ad spending in the second quarter (April-June). In fact Efficient Frontier did the maths and came to the conclusion that Google actually now takes $1.10 for every dollar spent in search advertising. This is not some wonky Sats marking, it means that both Microsoft and Yahoo! were losing search advertising money in that quarter - to Google.

Online advertising is projected to grow overall by something like 6% for the financial year - although this doesn't reflect the explosive growth in some very new areas of activity, such as the mobile internet and online video, or the fact that search advertising is going up by about 14%.

In the UK alone there were 3.6bn videos watched over the internet in May 2008 - more than a 56% increase on the previous year. The online market for video advertising was recently estimated by eMarketer as being worth around £700m a year. And the fact is that while the recession lasts, online media, because of its lower distribution and fixed costs, will continue to be some of the cheapest advertising. One of the areas that is likely to be hit by a steeper drop will be online display advertising - which, of course, is where most companies with more "traditional" web products are most exposed (the idea of a traditional web product is akin to the idea of an innovative wheel).

It doesn't mean, however, that a genuine recession will claim only old media casualties. There is still a really significant number of new media companies that are barely breaking even and still seeking investment, and one has to worry for some of them given the gathering advertising storm. But it is much easier to keep an online media brand going than an offline one because it is much more scaleable - no trucks have to take it to the four corners of the country and no transmitter bills have to be paid. Studios do not have to be kept open and no dead airtime has to be filled.

Where the recession could have a sharper impact is where there is very rapidly declining advertising revenue in an offline part of a business that can't absorb falling revenues in digital at the same time. Under this category one would have to worry about elements of the regional press, radio, the national press that might not have prioritised digital quickly or completely enough, and broadcasters who are similarly exposed. Just about everybody really.

Apart perhaps from Google. Search guru John Battelle was noting on his blog on Friday that the game was up: "If I were at Google, I'd be more than a bit worried. Why? Because once you've vanquished your competition then what?" Back behind the sofa then.

---

 

Web www.iconocast.com Search inside Iconocast for the keyword you have in mind. Iconocast has collected more than 50,000 articles and press releases on health and science. These are current and most up to date press releases on the subject you are searching. We collect current health and science press releases daily from more than 5000 research and health institutes. Here is an example : The elderberry way to perfect skin We believe if you do search inside Iconocast, you will get better results than searching the web alone.