Google

In November, I made a relatively courageous prediction. While Google was seemingly at the top of the world, and everyong was more or less enamored by anything and everything Google, I decided that they couldn't keep it up. They had too much positivity coming their way. Too much goodwill. Too much hype. And all of this without the underlying revenue to keep it up. In talks with a number of my friends who are "finance types," I told them that if I were an investor, I would short-sell Google in anticipation of their stock dropping significantly.

Turns out, I was right. While nobody in the world had anything bad to say about Google, I saw something in their business model that didn't seem to fit. Their business model was based on the idea that online advertising was the key to revenue. Everyone seemed to fall into this trap - Yahoo, Microsoft, and pretty much every other big online service provider decided that their ability to advertise successfully for clients was the key to their success. Keep in mind, this business model is successful...but it is becoming less successful each and every day.

Google's paid click through rates have been getting lower. Fewer people are clicking on their "targeted advertisements," and this could lead to some substantial problems for their business. In reality, though, this is not particularly surprising. Throughout the years, consumers have become less and less likely to be affected by traditional forms of advertisement on television, radio, and print mediums. Because of this, companies will often resort to newer, flashier forms of advertisement such as viral marketing and marketing stunts to get the attention of consumers. I would suspect that over the next few years, the strength of targeted online advertising will erode just as the strength of traditional advertising has eroded, and it will cause companies such as Google to adapt their methods and business models or else face significant problems in the future.