A red flag for Google?

Rob Hof

So Google thinks there are no signs of resistance to online ad rates that have risen 25% in the past year? Perhaps they need to keep their ears closer to the ground, or at least recent earnings conference calls. ...

Seems like we heard no small amount of resistance when eBay missed profit expectations by a penny and CEO Meg Whitman suggested the company will have to "find other ways" to market. Amazon.com also missed its quarter, thanks in no small part to much higher-than-expected marketing costs. Legg Mason analyst Scott Devitt told me he thinks paid-search companies such as Google will be fine for the next few quarters. But with two of the largest buyers of online ads watching marketing costs spiral skyward, he wonders how much longer the bidding wars will continue. "The price points of paid search could be peaking," he says.

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