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Google: Are Ad Concerns Overblown?

The number of ad clicks fell in January for Google and Yahoo. But how important are those click-through rates, anyway?

A closer look at numbers showing that Web surfers are clicking on Google (GOOG) and Yahoo! (YHOO) ads less frequently than in the past underscores why counting clicks may not be the best way to measure the effectiveness of Internet advertising—and suggests concern over an online ad slump may be overblown.

Google stock slumped 4.6% on Feb. 26 after Web measurement firm comScore (SCOR) said clicks on ads placed on Google were little changed in January from a year earlier, and that they fell 12% from the last three months of 2007. For Yahoo, ad clicks fell 3% from the fourth quarter. Google shares closed at 464.19, down 37.4%, from a record 741.79 reached on Nov. 6.