Are YOU Ready for a Google Crash?

I hate to say it. Hell, I hate to think about it….we’ve been enjoying the easy income that Google provides quality websites (through both search engine traffic and their easy-to-implement contextual advertising system “AdSense”) as well as the next site. In fact, I doubt it would be much of a stretch to suggest that the vast majority of independent “work at home” website owners/operators owe a disturbingly vast amount of their income to Google in one form or another. BUT….all the signs are invariably pointing to something that will soon be all too glaringly obvious:
 

The Google Gravy-Train is About to Come off the Rails 

So….what’s going to derail this seemingly unstoppably juggernaught of search-engine might? Simple…the same thing that is starting to pummel just about every other area of the U.S. (and global) economy: the national mortgage crisis.  

For the first time since their IPO, It looks like Google might miss their earnings estimates. 

No biggie, right? Heck, companies miss earning estimates all the time, so what’s the big deal? 

The big deal, in fact, is that all indicators seem to be telling anyone who is actually paying attention that they’re not just going to miss the estimates, they’re going to miss them by a mile. Rumors online go as far as to suggest that Google is actively trying to tell various analysts to lower their estimates.  If that is in fact true, then it will be the first time in Google’s young history that they've ever given Wall Street any guidance since the day of their IPO.  I doubt any of the institutional investors/players and/or brokers will make any kind of announcements regarding the lowering of their earning estimates – most of them are neck-deep in overvalued Google stock. They'll just do it as quietly as possible in an attempt to keep the stock up long enough for them to unload it at a profit. 

How the Housing Bubble Blew up All over Google 

Back before 2003, Google was more than happy to take money from the “shadier” side of the Web – offshore pharmacies, gambling, and other similar types of online "businesses" were counted among Google’s advertising clients. However, in 2003 Google decided to “clean up” it’s image and dropped those advertisers in favor of more “main stream” types of companies. Unfortunately, since that time, nearly 30 PERCENT of Google’s advertising revenue has been generated from mortgage-related companies. 

That’s worth saying again: Since 2003 almost ONE THIRD of Google’s revenue has come from mortgage-related companies. In fact, the list of the top ten companies that buy online advertising demonstrates how exposed Google is to the housing mess. Eight out of Ten of those companies are in big trouble – many are about to go bankrupt. When 80%+ of your top ten revenue sources that make up a third of your bottom line are in danger of going belly up – what do you think that is going to do to your profits?

Today’s estimate? $16.

It's simple math, really. If your customers are willing to pay you 50% less for the same product than they were before, than you are obviously going to make alot less money.

Less Money for Google (Probably) Means Less money For You

Despite the fact that we've seen decreased earnings from the Adsense program (as have many other people), it still remains the easiest and most convenient way to monetize a website. Unfortunately, while there is no sure-fire way to predict what the impact of the above will have on Google's pubisher's, it does seem to point to Google having to make some hard choices. If there is less revenue being generated, a company (normally) turns to cost-cutting measures (at least in the short-term) to make up for the short fall. While I highly doubt that any layoffs at Google would happen anytime soon, I wouldn't be surprised to see the portion of advertising revenue that Google shares with it's publishers to take a hit. In fact, it could be a big hit.

How big a decline is anyone's guess (since Google has never shared the exact percentage they pay on advertisement anyway, we'll never know), but Google will have a fine line to walk: Lower the payout too much, and they risk losing publishers to other networks. Not lower it enough, and they'll have to find other sources of revenue to prevent their stock from dropping off a cliff. In short - diversify, diversify, diversify. Seek out other ways to monetize your site, try out some of the other contextual ad networks, and take a look at some complimentary affiliate programs. Just because Google is a one-trick pony, doesn't mean you have to be.