Wednesday, October 20, 2004

Great outlook for the "search" industry

From the SF Chronicle:

Google predicted that the number of advertiser accounts will jump from 280,000 this year to 378,000 in 2005, according to the documents. From 2004 to 2008, the number of accounts is expected to more than double to 652,050.

"Clearly, adding close to 100,000 customer accounts per year is pretty significant," said Scott Kessler, an analyst for Standard & Poor's. "But the number of customer accounts is going to be increasingly less relevant over time."

Kessler said Google's future growth will be tied largely to higher ad prices. Customers will bid up the price of the ads, putting more money in Google's pocket, he said.

That's already happening in the search industry overall. A study by Morgan Stanley showed that ad prices for queries with two or three words, such as "APR credit card," nearly doubled to $1.84 per click between April 2003 and March.