MOUNTAIN VIEW, California: The general US stock market malaise combined with a report indicating that growth in Google's paid click-through rates had reached near-standstill, set the search giant's shares sharply southbound last week.

At close of trading on Friday (March 28) the stock languished at $438.08, down 41.4% on its fifty-two week high of $747.24.

Analysts attribute the setback to a report released Wednesday by web-tracking firm comScore. It revealed that Google's monthly click-through growth – which last year ranged between 25% and 40%  – was static in January and rose by just 3% in February.

Google, however, maintains that the nix in clicks is primarily due to an attempt to boost the efficacy of each click, thereby enhancing  an advertisers' sales performance. It cites as an example an increase in the space surrounding a click-through word, claiming this will help to minimize accidental clicks.

The moneymen appear relatively unperturbed at the click-rate downturn. American Technology Research analyst Rob Sanderson opines that Google's per-click revenues should improve soon because advertisers will pay more for them at auction if they perceive there to be greater value in each click.

Internet analyst Colin Gillis at Canaccord Adams is likewise upbeat, believing that the click-through rate is only one piece of the equation.

"The counterpoint is that Google is out there saying, 'We are trying to make our clicks more worthwhile.' They want to actually deliver relevant hot leads to their customers because that's what their customers want."

But not all haruspices are of like mind. Piper Jaffray analyst Gene Munster predicts Google will fall short of Wall Street's expectations in the current quarter because of the click-through rate.

And Lehman Brothers analyst Doug Anmuth is similarly pessimistic, trimming his 2008 profit estimate for Google.

He also believes that advertisers could be trimming their budgets in response to increasingly tough economic conditions – rather than just reacting to the changes Google has made. 

But on a different - and more significant - tack, ATR's Sanderson cautions against attaching too much credence to comScore's data which, he says, has a wide margin of error and can't be used to predict quarterly results.

"[It] has a really wide range of plus or minus in terms of being accurate. They don't know what the real number is, it's just a sample."

Data sourced from Associated Press; additional content by WARC staff