The Economist looks at internet advertising, and in particular Google, following a report from comScore in late February “that Google’s “paid clicks” had decreased by 7% during January, and were flat compared with the same month a year earlier. In other words, surfers who searched the web via Google itself, or who visited websites that belong to Google’s advertising network, clicked slightly less frequently on the little text advertisements that Google often places on these pages.”Google’s share price has plummeted 40 per cent since then with part of the blame lying in the stocokmarket itself. According to ,comScore Google “the likeliest explanation is instead that Google itself is to blame — by, paradoxically, increasing the quality of its ads. Google does this in two ways. First, it offers fewer ads on each results page, and often none at all. This reduces visual clutter and pleases both users and any remaining advertisers. Second, Google seems to be trying harder to weed out those advertisers who bid low in the auctions it conducts for advertising slots linked to particular keywords.”But The Economist asks “would users not click just as often, or even more often, on those remaining ads, since they are now presumably easier to see and more relevant? Perhaps not.”The article concludes, “[s]o if the drop in paid clicks turns out to coincide with more conversions into actual sales, Google’s revenue for each individual click ought to shoot up, since the marketers would be prepared to pay more. That in turn might mean that aggregate revenue growth for Google could still be healthy.”To read the full story in The Economist, see www.economist.com/business/displaystory.cfm?story_id=10962700.