Google’s Black Box

My friend Paul asks, "Why Was Everyone Wrong-sided on Google?"

I am not sure, but an anonymous emailer has a theory.  He notes that like GE Google (GOOG) also has their own form of a Black Box. Its the magic in between Google AdWords and Google AdSense.

"Stupid bloggers have no idea what they are getting paid for their Google ads. What is the CPM? You don’t know. That gives Google a tremendous financial flexibility to "adjust" the payout on the fly to make up any revenue shortfall."

That all might be true — it could account for some of the 42% revenue growth — but it doesn’t explain how Google managed a 20% click through rate on ads.

Question: Can (and does) Google change the rates they pay to meet their quarterly numbers?

Previously:

Kryptonite Caused GE’s Miss   
http://bigpicture.typepad.com/comments/2008/04/ge-loses-the-ma.html

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  1. Steve Barry commented on Apr 18

    The boys at Google are shrewd beyond belief…low-balled their IPO back in 2004, so they could award themselves boatloads of dirt cheap stock options. Remember when it came out…the media panned it, saying there was no info in the filings to warrant more than 100 in the Dutch auction. Came out at 85 and they got huge grants with strikes in the low 100s in late 2004. Now execs are cashing them out everyday.

  2. dark1p commented on Apr 18

    A 20% click-through rate??!!?!??

    Well, I know how they did that. They lied. Or they stacked the deck somehow.

    That’s an absurd figure. Lots of media planners out there spitting coffee this morning when they see that one.

  3. Vermont Trader commented on Apr 18

    Comscore only counts US click throughs. International made up the difference..

    I would note that GOOG beat estimates that have been lowered over the last few weeks due to sell side worries about click throughs.

  4. Marcus Aurelius commented on Apr 18

    We’re witnessing a high-level example of honor among thieves. If you think that any publicly traded company is presenting honest numbers right now (despite all of the “regulatory controls”), go ahead and jump in with both feet. Something is big-time wrong with this picture, and I, for one, don’t need to know or understand the underlying scheme to see that major manipulation of the markets is taking place.

    Is there a chance that all of our troubles are simply a bump in the road? Sure. But it ain’t likely.

  5. AC commented on Apr 18

    You know how Google hit their numbers? The same way they did back in the fall.

    Let me educate you, since I am a web master that actually uses their product (I have Adsense on my sites) and there’s a pattern here that you’re ignoring.

    In the fall, I was getting roughly 52 cents in eCPM. That’s my net.
    Until two weeks before Google’s earnings period closed, when I suddenly saw the eCPM drop to 26 cents.

    It looked like an anomaly at the time. It wasn’t.

    Google hit their numbers, but did their advertising suddenly fall off a cliff? Yes. To compensate they simply adjusted the “knob” that keeps more of the advertisers money, paying the web sites less. All this is 100% opaque; its not in their 10Qs how they compute the split or how it has changed.

    It stayed at that “new” number, on average, until last month.

    March 20th it happened again. eCPM dropped to FOURTEEN cents. And no, it hasn’t improved since, although we’re only most of the way through April. I guess it could be an “anomaly”, but I wouldn’t bet on it.

    Now I’m sure you can do the math on this, so I won’t insult you. But here’s reality Don – they’re simply cutting the pie into different size pieces as it shrinks out from under them, keeping more of the advertising dollars for themselves. My click-through rate hasn’t changed but on a per-exposure basis I’m now being paid roughly 1/4 what I was in the fall.

    I am now developing my own ad-management software for my web sites and will soon replace them entirely. Then they will have a 100% loss on my placements. Not that there’s much more for them to siphon off – they’re already damn close to zero, and even if I don’t fill all the slots I could hardly do worse.

    I’m sure you can figure out why this sort of crap is unsustainable, but it makes damn good theatre when you have options that you granted employees at $750 and are now underwater by nearly 50%. The drive to try to get them back up above the surface of the waves does powerful things – including ****ing off your partners.

    Note that this sort of “knob twisting” is extremely common in opaque businesses. Want to know why Google doesn’t set guidance? That’s why – they diddle the knobs right up near the end when the analysts have set THEIR expectations so they can hit the numbers.

    The fact is that they’re getting squeezed on both ends. It will show up, just as it did with CROX. Remember, just a few months ago CROX was going to save the world and make billions in China.

    Check their stock price lately?

    California’s unemployment rate is now well north of 6%.

    You think this is a $250 billion problem? Then you’re really a fool.

    There is somewhere between $2.5-$3 trillion in real economic losses on the underlying- that is, real credit losses – that will be taken on home mortgages across the US before this is said and done. The losses thus far taken are almost all on DERIVATIVES.

    The underlying credit losses are being hidden in “Level 3” and otherwise obfuscated. How do I know this to be a FACT? Because 97% of the foreclosure auction properties in California are going back to the banks and they’re keeping them on on their books at the loan value even though they tried to sell them at an average discount of 22% to that loan amount and failed.

    Truth is they got bids but refused them and also didn’t mark the houses down to the bid amounts.

    Its a scam and a fraud Donald.

    The median home cannot sell for more than 3x the median income. It is mathematically impossible with safe and sound underwriting. It simply can’t happen and no amount of armwaving changes this.

    California is still a good 20-30% over those values.

    I suggest that you watch this short video – this is a guy with 20 years in the business – he knows his stuff.

    Get educated Donald, and start being honest with people – or you will get exposed, as I’m fixing to feature your foolhardy claims in my Ticker come next week. The white-hot spotlight of reality is about to coming shining on in.

    You’re one of those folks that Warren Buffett was talking about when he was referring to people swimming without a bathing suit, and the tide is receding.

  6. Google Thieves commented on Apr 18

    Google has unexpectedly terminated my account right before they were supposed to pay me 10K for the clicks that my websites had generated in March. They sent me a stupid email, “we have determined that your websites are dangerous to our advertisers”, blocked my account, and did not pay. When I asked them about my $10K for the clicks, they told me that I had agreed to their agreement, which states they can cancel my account at any time, and they do not have to pay me a cent.

    Google has stolen 10K from me and I have agreed to this robbery by clicking “I agree to Google terms and conditions” when I signed up for their adSense. I am sure there were other publishers that Google has tricked like me.

    I cannot wait for adSense like program from Microsoft.

  7. michael schumacher commented on Apr 18

    people getting excited about a monopolistic business that makes money….they should be doing better than that since they have ZERO competition

    Big party when a company that gives NO guidance, loaded the boat with employee options (weren’t they supposed to cut back on hiring??) was handed a way to permanently fix the ad score biz (thanks FTC) and it only does that kind of result???

    Given it’s status as the only game in town they’re results should have been better. But hey when you hand out a 1/4 of trillion in options each qtr. it’s tough man….

    Ciao
    MS

  8. wnsrfr commented on Apr 18

    As a Google advertiser, I totally agree with the black box theory. The self-policing Google is supposed to do on the affiliate sites is just too tempting to fiddle for a public corporation.

    If I run a new block and forget to opt-out of the affiliates, my budget is used-up in 2 hours. All 2 clicks per site on crap parking-lot sites that pose as interest sites.

    Google Thieves, can you provide a URL to one of your sites–are they real?

  9. Steve Barry commented on Apr 18

    Short interest on GOOG, like all the other big Nasdaq names is virtually non-existant…would not be surprised if this gap closes soon.

  10. B. Walthrop commented on Apr 18

    With a $14B dollar cash position it would suprise me quite a bit if Google was not able to operate other black boxes (ala GE Finance) that could account for their revenue and earnings as well.

  11. Google Thieves commented on Apr 18

    MS,

    You are 100% correct. They do not have any competition to their adSense — none, zero, nada, zilch. Most of Google’s revenue is coming from adSense.

    I do not understand why Yahoo (in development and testing Yahoo! Publisher Network Beta) and Microsoft (in development MS adCenter for publishers) are dragging their feet for years.

  12. michael schumacher commented on Apr 18

    marcus-

    you get the feeling that there are several sets of books now??? one for the “investors” one for the accountants, one “real” one.

    I get the sense that we’ve gone through the looking glass (not in a good way) and that these prick banker’s (IB’s) just might get away with this crap for the forseeable future.

    How can you compete with the destruction of capital (at a record rate) and these pricks in washington keep providing more to them.

    When did the laws of mathematics change that made secondary offerings not dilutive??
    answer me that one…..LOL

    Unbelievable that this shit continues unabated …..all in the name of ‘merica

    Ciao
    MS

  13. Marcus Aurelius commented on Apr 18

    MS:

    I’m with you. Frustrating as hell, and sad. The only solace I take is that when the bottom comes, I’m climbing on top for the (safe) ride up.

  14. Bob Abouey commented on Apr 18

    Wow. BR posts: “I am not sure” why everyone was wrong on google, but here is one fairly random, entirely unsubstantiated, theory from an “anonymous emailer.” This is the extent of the comment on a major surprise by one of the largest public companies in the world.

    Nothing wrong with a blogger posting little snippets like this, but it is a bit strange for a financial blogger who is so adamant on fact driven analysis…

    BP jumping the shark?

    ~~~
    BR: My friend Paul asked a question, and since I wasn’t sure of the answer, I wrote “I’M NOT SURE.”

    I know you are not used to people saying, “Hey, gee, I don’t know.” Most people try to bullshit their way through. I don’t — I simply say I do not know. What do you do?

  15. Google Thieves commented on Apr 18

    wnsrfr,

    My sites are 100% real (no click farms). The clicks that my sites had generated were 100% real too. I cannot provide the links because someone will be able to ID me by visiting the sites. Sorry, I need to stay anonymous.

  16. tom pitts commented on Apr 18

    this post about their changes in clickable ad area looks prescient right about now.

    i bought a few shares of google in the 430s because i thought they were cheap, debating whether to sell today.

  17. tom pitts commented on Apr 18

    Most of Google’s revenue does not come from adsense.

    The company’s partner sites — known as the AdSense network — generated $1.69 billion, or 33% of total revenue during the quarter — a 25% growth in network revenue compared to the same period last year, and a 3% rise since the fourth quarter of 2007.

    Source: Google Shares Jump as Profits Impress

    Also I don’t believe that Google had a 20% click through rate, they increased their CTR by 20%.

    Adsense CTR is generally 5% or less in my experience. Paid search is probably higher.

  18. Bob Abouey commented on Apr 18

    Tom Pitts appears correct, from transcript:

    “Aggregate paid clicks include clicks related to ads served on Google properties, as well as ads served on our partner sites. Aggregate paid clicks grew approximately 20% over Q1 2007 and approximately 4% over Q4. Paid click growth on Google.com in the U.S. remains healthy and other markets are showing strong growth as well.”

    http://seekingalpha.com/article/72846-google-inc-q1-2008-earnings-call-transcript?source=wildcard&page=-1

  19. Bud commented on Apr 18

    Yes, but who controls that click rate tally? Think the tech that tracks clicks isn’t manipulated or faulty? Google rev partners take whatever checks arrive in the mail. Google has the upper hand.

  20. Rosevillebill commented on Apr 18

    The reason Google had a higher click through rate is that all the companies are very slow due to the downturn. The employees sit around at work surfing the web. Next month they may be laid off so then they’ll be at home clicking through even more. Google is in a win win situation for now.

  21. Rocco commented on Apr 18

    Hey Bob Abouey!

    Since you are complaining about anonymous emailers, how about posting your real name and website?

    Or are you just another in a long line of anonymous cowards and hypocrites?

  22. michael schumacher commented on Apr 18

    bud understands…….

    It’s not about what they report…..it’s ALL about what they do not.

    OK 20% increase??…increase from what level of measurement???

    Answer that and the cracks appear a bit more…

    It’s like saying “stocks are cheap”

    relative to what???

    Ciao
    MS

  23. Bob Abouey commented on Apr 18

    BR – Nothing wrong with saying I don’t know.

    Saying I don’t know, but then giving prominent treatment to an anonymous quote with no factual support, that is different.

    And you know it. If CNBC pulled that stuff – we’re not sure if home sales are declining, but here’s a random guy who says its recovering, you’d call them on it.

    ~~~

    BR: This isn’t TV, its a blog. Different standards of appropriateness. (You should understand that).

    Its not the emailer,but the concept he raised that was so intriguing. And I must hasten to point put that neither of your comments responded to the issue of does Google have a blackbox, and can they change what they payout for clicks.

    Can BA or anyone else answer the original issue?

  24. Suzann commented on Apr 18

    I have always thought their
    ad click revenue generation
    could be vulnerable to fraud. I
    am reminded of the Equity Funding
    Corp.insurance scandal (California) of
    the early 1970’s.

    Suzann

  25. lunatic fringe commented on Apr 18

    What have we come to when people clicking on ads is a business model? Who clicks on ads anyway? More an annoyance than anything else.

    2 words – Firefox and Adblock

  26. Bud commented on Apr 18

    MS: And I doubt the auditors dig into the code that could be bugged or manipulated

  27. CR commented on Apr 18

    Goog revenue was up 42% yoy but accounts receivable was up 73% yoy. Talk about extending credit.

  28. i try to avoid reading comments but still can’t help myself commented on Apr 18

    GOOG is all about….

    international, international, international exposure.

    occam’s razor strikes again.

    in hindsight it was obvious to load the boat….but it’s always obvious in hindsight.

    we won’t see the $700s soon but GOOG’s not going to zero either.

  29. MrWoohoo commented on Apr 18

    Part of t might be users like my mom. Her process for finding a she heard about from TV:

    1) Open new browser window (default page = Google)
    2) Type URL into google search box and hit return
    3) Find link in results page (usually a sponsored link).

    Presto! 100% Clickthru.

    We try to teach her about URLs but she feels it would take HOURS OR DAYS of complicated instruction so as long as it works she’s going to do it her way.

  30. dd commented on Apr 18

    No one seemed so upset when there was a miss last quarter… interesting.

  31. Fred commented on Apr 18

    “people getting excited about a monopolistic business that makes money….they should be doing better than that since they have ZERO competition”

    MS – you obviously don’t understand monopoly pricing. fastest road to regulatory intervention is to charge more than what the market will bear, but you set the market price to the extent it remains prohibitive for competition to enter. duh MS. anything positive you poo-poo. what does work in your narcissistic red state universe?

  32. tom pitts commented on Apr 18

    The short answer is GOOG does have a black box.

    When it comes to adsense (the contextually targeted ads on other people’s content sites), as far as i know they do not publish the average revenue split and this can could be changed at their whim.

    They do make firm agreements with some of their larger partners though such as myspace.

    Also their search ads are not a true bidding system like Yahoo’s used to be. They have metrics such as ‘quality score’ of their ad. Manipulating these metrics could potentially drive up the prices some advertisers have to pay to get clicks, even if no other advertisers are bidding near this amount.

    Personally I think they do a fairly good job on click fraud and don’t think they have any incentive to lie about click through rate or cost per click.

    Hope that helps answer the question.

  33. michael schumacher commented on Apr 18

    Fred-

    You’ve no idea what you are talking about……

    I’m sure Goog is really worried about having rules slapped on it to “control prices”.

    When you control the ad market there is little incentive to change especially if you are profiting from it.

    No one made noise about the banks having a monopoly yet look how all that regulation still failed to control the greed and avarice in that sector.

    You are truly a fool….

    Ciao
    MS

  34. Roman commented on Apr 18

    This blog is getting a little ridicilous. Anytime the numbers support your thesis, you support them. Anytime they don’t, the numbers must be cooked.

    I read another blog thats very bullish, it just ignores bad numbers. But at least it doesn’t try to imply that the bad numbers are cooked.

    ~~~

    BR: Roman, I didn’t say the numbers were cooked.

    I asked about an important revenue issue where the actual facts — what is the ad sales split between publisher and Google — are unknown.

  35. Fred commented on Apr 18

    Roman – yes. there are a few personalities here who probably need therapy or another country since they just can’t be satisfied. the rest of the world marches on in grey. but the discourse is nice on a very basic level and perma-bears are just as necessary as the rest. funny thing about MS is he gets personal really fast if you even hint at questioning his point of view.

  36. michael schumacher commented on Apr 18

    >>But at least it doesn’t try to imply that the bad numbers are cooked.>>

    on the contrary Roman I (and many others) are implying that the good numbers are cooked.

    Fred-

    Really…. reaching out to someone by trashing another??

    and I need therapy??

    thanks for playing you are what you project…

    Fool.

    Ciao
    MS

  37. Eddie commented on Apr 18

    Let’s see… Another company reporting better than expected earnings, another conspiracy theory.

    This blog should get back to focusing on legitimate economic issues, else it will be in danger of losing credibility.

    ~~~

    BR: Its not a conspiracy theory, its a simple question about their business model.

    I’ll ask it again, ’cause you missed it the first time: What is the split between Google and their publishers? Is it fixed, variable, published, secret?

  38. michael schumacher commented on Apr 18

    let’s see another company that reports earnings from expectations that have been LOWERED so is that really a beat??

    It is when you consider the following:

    During yesterday’s conference call, Google said its revenues would have been $202 million lower if foreign currency rates hadn’t risen so sharply against the dollar during the first quarter. Google’s actual share of foreign search queries only increased from 62 percent in December to 63 percent in February.

    The tanking dollar allows Google to report massive increase in profits based on a 1% growth rate in foreign search queries…

    Try again Eddie…

    Ciao
    MS

  39. DonKei commented on Apr 18

    I don’t really care whether Google lied or not. A one-day increase of 19% in their stock price, yielding a roughly $2.1b increase in their market cap, is the essence of irrationality. Either they were irrationally undervalued yesterday, or they are irrationally overvalued today.

    I don’t see where making observations of irrational market behavior is gloomy. It’s just stumbling around for slivers of truth.

    When I was a young lad, wee out of college w/ a freshly-minted economics degree, I really believed that neo-classical economics stuff about the rational man to be true. Now I find that the very last place one should look to find rational behavior is in the markets, unless you figure the whole thing is nothing more than a crap shoot, and people are playing w/ money they can afford to lose. Then it makes sense, while at the same time making it meaningless, and not worth the bother.

  40. joannaz commented on Apr 18

    I am dumbfounded that google has no real competition when they are practically printing money! Their margins sure have my attention. I would also like to see if they are taking in cash or what or do we have an Enron here?

  41. ac commented on Apr 18

    You know how Google hit their numbers? The same way they did back in the fall.

    Let me educate you, since I am a web master that actually uses their product (I have Adsense on my sites) and there’s a pattern here that you’re ignoring.

    In the fall, I was getting roughly 52 cents in eCPM. That’s my net.
    Until two weeks before Google’s earnings period closed, when I suddenly saw the eCPM drop to 26 cents.

    It looked like an anomaly at the time. It wasn’t.

    Google hit their numbers, but did their advertising suddenly fall off a cliff? Yes. To compensate they simply adjusted the “knob” that keeps more of the advertisers money, paying the web sites less. All this is 100% opaque; its not in their 10Qs how they compute the split or how it has changed.

    It stayed at that “new” number, on average, until last month.

    March 20th it happened again. eCPM dropped to FOURTEEN cents. And no, it hasn’t improved since, although we’re only most of the way through April. I guess it could be an “anomaly”, but I wouldn’t bet on it.

    Now I’m sure you can do the math on this, so I won’t insult you. But here’s reality Don – they’re simply cutting the pie into different size pieces as it shrinks out from under them, keeping more of the advertising dollars for themselves. My click-through rate hasn’t changed but on a per-exposure basis I’m now being paid roughly 1/4 what I was in the fall.

    I am now developing my own ad-management software for my web sites and will soon replace them entirely. Then they will have a 100% loss on my placements. Not that there’s much more for them to siphon off – they’re already damn close to zero, and even if I don’t fill all the slots I could hardly do worse.

    I’m sure you can figure out why this sort of crap is unsustainable, but it makes damn good theatre when you have options that you granted employees at $750 and are now underwater by nearly 50%. The drive to try to get them back up above the surface of the waves does powerful things – including ****ing off your partners.

    Note that this sort of “knob twisting” is extremely common in opaque businesses. Want to know why Google doesn’t set guidance? That’s why – they diddle the knobs right up near the end when the analysts have set THEIR expectations so they can hit the numbers.

    The fact is that they’re getting squeezed on both ends. It will show up, just as it did with CROX. Remember, just a few months ago CROX was going to save the world and make billions in China.

    Check their stock price lately?

    California’s unemployment rate is now well north of 6%.

    You think this is a $250 billion problem? Then you’re really a fool.

    There is somewhere between $2.5-$3 trillion in real economic losses on the underlying- that is, real credit losses – that will be taken on home mortgages across the US before this is said and done. The losses thus far taken are almost all on DERIVATIVES.

    The underlying credit losses are being hidden in “Level 3” and otherwise obfuscated. How do I know this to be a FACT? Because 97% of the foreclosure auction properties in California are going back to the banks and they’re keeping them on on their books at the loan value even though they tried to sell them at an average discount of 22% to that loan amount and failed.

    Truth is they got bids but refused them and also didn’t mark the houses down to the bid amounts.

    Its a scam and a fraud Donald.

    The median home cannot sell for more than 3x the median income. It is mathematically impossible with safe and sound underwriting. It simply can’t happen and no amount of armwaving changes this.

    California is still a good 20-30% over those values.

    I suggest that you watch this short video – this is a guy with 20 years in the business – he knows his stuff.

    Get educated Donald, and start being honest with people – or you will get exposed, as I’m fixing to feature your foolhardy claims in my Ticker come next week. The white-hot spotlight of reality is about to coming shining on in.

    You’re one of those folks that Warren Buffett was talking about when he was referring to people swimming without a bathing suit, and the tide is receding.

  42. chaz commented on Apr 18

    google also reads your email.

    who knows how they triangulate all that data in their “black box,” and how much they can sell such an intimate surveillance of your personal life for, every month.

    but hey, if the stock goes up, that’s a win, right?

    communism manipulates capitalism.

  43. Steve Barry commented on Apr 19

    AC,

    In other words, Google is risking the very existence of their customers for short term earnings gains…and if they continue to beggar their customers, their own future looks grimmer. They better hope this recession is short and shallow as the experts predict, because my MBA tells me this ain’t no way to create sustainable competitive advantage. It sounds like a way to become a smoldering crater.

  44. Guy B commented on Apr 19

    I thought that Google was pretty consistent in paying 80% of advertising revenue to publishers. The 80% figure is often quoted.

    The fact that Google doesn’t provide detailed accounting with their publishers, as expressed by the anonymous emailer, is an example of how little competition Google has. Publishers will stay with Google as long as Google can maximize ad revenue for them.

  45. Bill King commented on Apr 21

    Google explained – The almost 90-point jump in Google on Friday, on much better than expected
    earnings and revenue, caned the hedge fund mafia and their media stooges.

    A dirty little secret of high finance is that some of those famous titanic hedge funds aren’t really that
    smart. So they compensate by glomming off smarter hedge funds and using the media to talk their book.

    A few weeks ago, some tech analysts and industry research companies opined that Google’s revenue
    would increase only 4% to 5% due to the recession. This news spread among the hedgie mafia and their
    stooges. Google fell from 475 to 446 over the past week as some hedge funds got massively short and
    told [which some people would say is collusion] other hedge funds about their ‘inside’ info/scoop who in
    turn told their trading and media stooges until the process resembled that old Breck shampoo commercial.

    However there was at least one private [non-Street] analyst who understood that the conventional wisdom
    on Google was wrong and the hedge fund mafia that massively shorted Google would be punished.

    His dead on analysis was Google’s revenue would exceed expectations because the slowing economy was
    forcing companies to dump unused hotel rooms, plane fares, etc onto Internet sellers and those sellers and
    other hard-pressed sellers would increase ads on Google. And he ‘did the work’; it wasn’t a guess.

    In effect the slowing economy, at least for a while – until ad budgets are depleted, will benefit Google
    (and eBay, which also produced better numbers than expected last week).

    Ergo analysts, pundits & fin media types that reported ‘Google did well despite the recession’ or ‘Google
    is resisting economic ebbing’ don’t know what they’re talking about. The recession is helping Google.

  46. BRIAN STELTER commented on Apr 21

    Web Metrics and Grains of Salt

    Perhaps Internet metrics should come with a warning label: “handle with care.”

    Stock in the measurement firm comScore slid in after-hours trading on Thursday after Google reported surprisingly strong first quarter earnings. Why the decline? Analysts were primed for a poor performance from Google after three straight months of comScore reports showing a slowdown in paid clicks on the Web giant’s sites.

    Google derives income when users click on advertisements, and the apparent deceleration — comScore projected only 2 percent growth in paid clicks in the United States, compared with 30 percent growth in the previous quarter — led many analysts to cut their estimates in anticipation of Google’s earnings news. It also prompted speculation that the economic downturn was affecting the online advertising market.

    But on Thursday Google reported a 20 percent rise in paid clicks from comparable quarter in 2007. Eric E. Schmidt, the chief executive of Google, pointedly said on the earnings call that “paid click growth was much higher than has been speculated by third parties.”

    The swipe at measurement firms like comScore did not go unnoticed. Technology and media leaders have long held reservations about the data provided by the companies who serve as Internet traffic reporters. Using panels of self-selected individuals and samples of users who share access to their online activity, the companies measure page views, spending habits and advertisement engagement. Their numbers sometimes vary significantly from the internal measurements of Web sites.

    Last week, though, comScore’s estimates were shown to be directionally correct. The growth in Google’s paid clicks is slowing, although perhaps not to the extent that comScore had projected. Google’s 20 percent growth figure included international traffic, leading analysts to presume that a rapid rise in paid clicks in other countries offset slower growth in the United States, where comScore’s measurements were made.

    But analysts cannot know for sure because of a “dearth of public information” available about Google’s revenue drivers, said Andrew Lipsman, an analyst for comScore, in a blog post on the company’s Web site about the discrepancies.

    Magid M. Abraham, the chief executive of comScore, said the company shared its paid click estimates only with analysts who were aware of the limitations of the data. When it enters the bloodstream of Wall Street, however, the qualifications are often lost. “At the end of the day, our data is really only one element for predicting profit and loss,” Mr. Abraham said, “but people become overly focused on it.”

    Mr. Abraham said comScore intends to accelerate its introduction of international paid click measurement.

    ComScore’s stock closed down 40 cents, or 1.70 percent, at $23.18 a share on Friday.

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