ThoughtGadgets gets top marks for the headline 'Google results falling fast. Here's why.'
But their analysis - that search volumes and therefore ppc revenues are consistently falling - is surely wrong.
Google Trends data does show the volume of searches for certain generic terms dropping over time (relative to total search volume). But that masks two other trends:
- More savvy consumers searching for three and four word search phrases
- A rise in navigational search which results in more searches for brands
So here's the Google Trends data for 'music download' - which shows a consistent decline (and peaks each Christmas.
And here is the trend data for the top branded term in this sector, 'itunes', which shows a clear rise, with even bigger peaks each Christmas - well done Apple! Of course, from a revenue point of view this might not be such great news for Google - searches on brands with brand protection in place will deliver a much lower CPC than key generic terms. 
Update: just noticed that Hitwise has some data showing that traffic going from Google into shopping sites has actually increased over the past 3 years. So whatever the source of Google's woes, it isn't a drop in search volumes.
This is a good second analysis. As noted, our Thought Gadgets piece used qualitative information to spot the trend, and you are correct that searches are only down in certain categories.
We still think the trend is real. Google has made aggressive moves lately in adjusting its PPC formulas to try to wring more money from advertisers, and anyone running Adword PPC campaigns for direct-to-consumer goods is seeing diminishing responses. Google is worried, and advertisers are troubled.
A few reasons we think Google is under threat:
1. Consumers are spending more time "doing" on the internet, and less time "hunting" -- meaning they "do" content creating and sharing with blogs and Twitter and video uploading. Since there are only so many hours in the day, this shift in online behavior must depress search volumes.
2. In the near term, U.S. consumers will adopt small screens, such as cell phones, to access the internet. Analysts see it coming in Asia and Europe, and as handset makers emulate the iPhone and as U.S. cell networks finally get their bandwidth together, mobile popularity will be huge. This poses a gigantic risk for Google, because small screens carry less visible "inventory" for PPC advertisers to place ads. A typical web site window on a computer monitor has room for 9 Google text ads; your mobile phone has room for 1 or 2. Ouch. Fewer PPC ads = fewer dollars for Google.
Obviously these are generalizations, and falling search volumes now manifest themselves only in certain categories. We think Google will always be a viable medium, but as consumers move beyond web windows to other ways to network and gather information -- such as from the 110 million blogs in the world -- Google may lose its current status as the portal for consumer information.
Cheers! Ben Kunz, director of strategic planning, Mediassociates, www.mediassociates.com
Hi Ben,
You make some great points here - from a UK perspective it's a little hard to think of Google losing any kind of status given that they currently have a 90% share of searches! But clearly they are having some problems - and speaking personally I rely more on rss and recommendations to bring me interesting content rather than reaching for Google every time.
I'm also interested in the impact of universal search. I saw some screen grabs the other day showing the changing heatmap of a serps page when video or photos are included in the results - essentially the eye of the user is being drawn deeper into the natural search results. That seems to indicate a richer user experience - but might also be bad for Google if the user is skipping the ppc ads at the top of the page to dive into natural listings.
Thanks for taking the time to comment!