Google Misses Earnings: Is Anyone Surprised?

It blows my mind that forecasters, including Google’s internal forecasts, did not more clearly take into account the impact that their June attack on arbitrage would have on their earnings.

Google, bowing to pressures of general advertisers and searchers, decided to bite the hand that feeds it – the masses of Adsense publishers and Adwords arbitrage experts who poured money into Google. While their campaigns were targeted and only directly affected a handful of publishers and advertisers, the ripple effect (damn those ripple effects) spread throughout the industry sounding the bell tone: “if Google will go after Arbitrage, eventually, they will go after Made-For-Adsense”.

I would love to see the defection rate of this past quarter compared to others. I know several publishers who finally made the switch and, while their return is not as high, breath a sigh of relief to finally get Google out of their lives.

Google should expect to continue to see this kind of resistance to their policies which shun the most effective, efficient publishers they have. The truth is, Google’s earnings have long been more in line with what you would expect out a company that pushes the boundaries. Now that Google has removed their front lines, they need to adjust their expectations.