Sunday, January 27, 2008

The recession is in.

I'm not quite sure what to make of this statistic that Google searches dropped month by month for October, November and December of last year. The article mentions that normally searches drop around Christmas, but I don't consider October and November to be 'around Christmas'. And I am not aware of another search engine that is taking that kind of market share from Google.

Some are saying a recession started late last year, and something has definitely gotten both the Fed and Administration motivated to stimulate the economy in a hurry.

I suspect this statistic is telling us something important.

Investor's Business Daily: Even Vaunted Google Ad Business Susceptible To Recession.

[If you can't view that, also available at CNNMoney.]


Some evidence suggests a search slowdown. The average number of daily Google searches in the U.S. fell from 4.4 million in October to 4.2 million in November to 4 million last month, says Nielsen.

The average number of topic searches per user also dipped, falling to 37.9 in December from 40.8 in November, Nielsen says.

Analysts say it's too early to make much of these figures, since search activity typically falls around Christmas, but a continued decrease in search traffic likely will mean consumers are buying fewer products online, Parr says.


Reading a bit more about search and Nielsen's work, it seems there may be two factors that confound this bit of data [I think here of the quote about 'lies, damned lies, & statistics'..].

One, Microsoft appears to have taken a bit (a small bit) of market share away from Google in December via the giveaway of trinkets.

Two, Nielsen apparently changed their methodology for rating search share in.... October. Since the data cited above begins in October, this means the data could be suspect.

The observation though, is about the trend of lower searches and I can't find a statistic on overall searches. But I did find an article and search data provider (Comscore) that indicates that a related item, paid search, decelerated recently. (See 'Why Google Got Crushed Today'.) So the general theme is alive.

I'd also highlight this observation about the shipping index:

Financial Post: What could rattle Canada?


One statistic stood out. The Baltic Dry index, a composite index of shipping costs for dry bulk items such as cement, sugar and coal, posted record drops two days running.

Having lost 20% last week, the index is now down 42% from its November peak.

"The recent collapse in the Baltic Dry Index ... is a warning sign that the commodity boom could be about to come to an abrupt end," warned Julian Jessop, chief international economist at Capital Economics in London in a note.

The index is considered a good proxy for global growth, although it must be pointed out the declines last week were magnified by disruptions as a Brazilian miner cancelled 30 large cargoes of iron ore in a pricing wrangle with China.