Google Clicks: a Dubious Economic Indicator

The search giant's stock sags on reports that its paid search fell last month.

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Analysts debated today whether you can count on a new economic indicator: Google clicks. Google's shares fell about 5 percent in trading as several analysts said a reported drop in paid clicks could indicate that an economic slowdown is hitting the search market. The fear is that companies will slow advertising and consumers are less likely to click on the ads—which is how Google makes its money—as their shopping appetite slows.

But hold on, says another company that monitors Web traffic. There is no sign yet of a drop in the amount of traffic going from Google to retail sites, says Bill Tancer, an analyst at Hitwise.

That would lend more credence to alternative theories. A few analysts argue that the drop in paid clicks may only reflect changes inside Google, which has said it's trying to clean up accidental and fraudulent clicks.

Online sellers who depend on Web searches to find their sites can tell you that internal Google changes can quickly shift traffic patterns, for good and bad. So it seems dangerous to look at one month of Google clicks as a broad indicator.