http://www.ft.com/cms/s/0/3fc8f6dc-1ff0-11db-9913-0000779e2340.html

http://www.techcrunch.com/2007/03/21/digesting-googles-new-ppa-advertising-product/

The past several weeks we have discussed the internet and the implications of link analysis 

and the ranking of sites. In today’s extremely volatile stock market, the search engine giant 

Google stands at as one of the lone bright spots in an incredibly shaky economy. As discussed

 in Chapter 10 of our text, internet advertising has become a multi-billion dollar industry and 

the primary source of revenue for Google. Net advertising is a topic very closely tied to the 

central themes of this course because it combines elements of both social and information 

networks. As Google rose above the pack of a multitude of startups in the early 2000s, 

it was a strong advocate of “Cost Per Click” advertising or CPC. This (up until about 2006)

 was seen as the most advanced and efficient means of online advertising. The clicks were 

considered an action of intent and therefore communicated a specific interest. However, 

as competition heated up in online retail, companies started using the malicious tactic of 

click fraud to drive up the cost of advertising for other companies. This occurrence is 

outlined in detail in the Financial Times article I have listed. As a result, a more efficient

 means of gauging customer interest and advertisement pricing was needed. Just recently

 Google launched a new product to counter this click fraud. This new attempt at online 

advertisement is outlined in the Tech Crunch article posted above. This new style is called 

Pay Per Action which charges an advertising fee each time a customer actually places a

 product in a shopping cart. This system is a good way of ridding sites of click fraud and

 better regulating advertisement pricing. However, as the Financial Times article points 

out the company that develops the most modern and advertising strategy would gain a 

serious advantage in the market. This forced me to tink back to my first blog post 

where I was examining the “gatekeeping” properties that Google exhibited. Just as

 before, because of their level of market share, Google sets the tone for all internet

 advertising. Net advertising is one of the most complex services to valuate. This 

makes me question the extremely high rate at which Google’s stock is valued. With 

these constantly changing modes of advertising and complex pricing valuations it would

 not surprise me if Google’s bubble soon bursts. With its constant innovation Google 

will either continue to dominate the web or suffer the consequences of over valuation. 

Either way these articles point out how much of a role the ideas we discussed in class 

play in the modern business world.