The last several months have been defined by falling stock prices, a credit crisis, and overall economic weakness. However, we thought it would be an opportune time to highlight a company that we feel is poised to emerge from the rubble better positioned than ever: Google (GOOG).
Most forms of traditional media can't be tailored to reach a highly targeted audience. Search, on the other hand, delivers a very targeted audience because users are explicitly stating an interest in a particular product, service, or topic. By not wasting time, effort, and money on uninterested parties, search advertising provides a high return on investment relative to other forms of advertising. In addition, search advertising is also very measurable relative to traditional advertising, as marketers can track the number of consumers who have actually viewed an ad, "clicked" on it, and taken a specific action (purchased a product, filled out an application, signed up for a subscription, etc.). We think the inherent advantages of search and the continued growth of Internet usage will lead advertisers to allocate more of their ad budget to search, resulting in good growth prospects for the industry for years to come.
Larry Witt, CFA does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.