Growth in Tech Becoming an Issue

The tech sector will continue to be the place to make money but it is also a sector that can be quite volatile. One major mistake and you can find yourself on the sidelines looking in.

Over the last two weeks, I have been noticing several key bellwether technology stocks warning of slower growth or reduced expectations. The problem is when the NASDAQ is rising as it has been in 2006, you really have to take a step back and evaluate the current situation.

It was the first warning ever by Google and shows that no company is immune to bad news tech web post. Of course, Google executives subsequently tried to reassure investors that all was not bad and that it would eventually become a $100 billion company.

The reality is Google appears to be giving out mixed signals and in fact is just trying to do some damage control, especially when the stock has seen tens of billions of dollars in market-cap vaporized. The truth of the matter is there clearly are some growth issues. And if the advertising cycle reverses or slows, Google could be heading much lower than the current price.

Research in Motion (RIMM, TSX/RIM) made a downward revision in its Q4 earnings to between $0.64 and $0.64 per diluted share, down from the previous forecast of $0.76-$0.81. Q4 revenues were axed to between $550 million and $560 million, down from $590 million to $620 million. The consensus Street estimate was $0.78 per diluted share on revenues of $608.6 million according to Thomson First Call.

On Monday, bellwether Texas Instruments (TXN), the top supplier of mobile phone chips, gave the market a mixed message. Texas increased the lower end of its profit range for the first quarter to $0.31 per share, up from the previous low end of $0.29 per share. The problem was the top end was left unchanged at $0.33 per share, something the market was clearly not happy about, with some selling in the stock in after hours trading on Monday.

The point is the market wants to hear good news and Texas failed to provide it. Even on the revenue side, the new range of $3.22 billion to $3.35 billion was marginally light on the top end compared to the previous range of $3.11 billion to $3.38 billion provided in January.

I’m noticing a trend in my AdSense revenue per day across all the sites that I currently manage and wanted to get some feedback from other webmasters on the issue. I have a MySpace related site which brings in around 1000 uniques a day, not bad since its only a couple months old. The MySpace site gets a little under 100 clicks a day, with that type of traffic. My webmaster related sites however might collectively get the same traffic as MySpaceResources.net but the CTR is much lower, most days none at all.

Now there are a lot of variables besides just topic that I’m thinking might be attributed to the lower CTR on my webmaster and tech related sites. Some of them at this time might be out of my control. Stuff like domain age, the existence of other, established related sites with repeat audiences, market reach, ad placement and coverage to name a few. Some stuff I probably can try to bring up my CTR would be expand my linking strategy and paid advertising methods to increase my traffic. At this time MySpace also acts like a viral marketing campaign so my advertising efforts haven’t been much but for greater gain. Its one of the most visited websites on the net now and has a growing audience, kinda like eBay is for sellers. Webmaster related sites are almost a a dime a dozen these days, with your’s truly adding to the mix.

One thing that really makes sense, at least in my mind, that would affect my AdSense CTR would be the demographics of the user base. On my MySpace site the ads are placed in places with images next to them that would encourage users to click. Ads are also really relevant to my content and offer complementing products which someone who visits my site might also be intrested in. The amount of advertisers for MySpace related items are a lot, one only has to see the revenue earned per click from MySpace related ads and they can tell you. While I won’t divulge specifics here, lets just say it would take you a couple hundred clicks with most ads to be able to buy a decent sized candy bar or pack or cigarettes for those like me who really should know better. One click on an ad on my webmaster related sites would most likely bring me more revenue than 80% of my average clicks from MySpaceResources.

Anyways, back to how this ties in with demographics. My webmaster sites obviously bring in a tech savvy crowd or at least ones looking to earn a little more knowledge in the field. The tech savvy know what a Google AdSense ad looks like, you can blend them in, position them just right and make the look like menus with images next to them. You’re not fooling anyone. They’ll get clicked when the viewer is genuinely interested in the product being advertised. Ad blindness seems more prevalent for the ones seeking to expand their knowledge on topics they know about rather than those seeking a product itself.

The MySpace related sites are mostly teenagers and young adults looking for stuff for they profile pages. Most of them couldn’t care less about AdSense, YPN, adCenter or the trouble most of us go through to get our projects noticed on the net. They want their glitter text and friends train with the cool layout and background. For them seeing a link on there for another cool item that would look great on their page is just par for the course. They may be interested but might not see the link as an ad and as a result the apprehension on clicking on ads won’t arise.

In case some of you are wondering how I came up with this… well I used my data and resources at hand. Did a quick survey with some people off my profile on MySpace and talked to 10 friends who know a bit about web development. Not a whole lot, but enough to get this idea.

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