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Journalism of Courage
In recent weeks, abundant evidence has pointed to a recession 8212; a broad-based contraction of economic activity 8212; from rising unemployment claims to the continued pain in housing. Wall Street economists, whose employers have been experiencing their own private recession since last summer, haven8217;t shrunk from using the R word. But in certain quarters of Washington, euphemism and understatement, verging on outright denial, are par for the course8230; In last year8217;s hit comedy Knocked Up, a character, queasy about using the technical term for terminating a pregnancy, refers to a procedure that 8220;rhymes with shmashmortion.8221; Bernanke and the man who appointed him, President Bush, are clearly coping with similar verbal tics. Call it a slowdown, cite challenges, or insist the fundamentals are sound.
But please don8217;t call it a recession. Speaking at a press conference on Thursday, Bush said, 8220;I don8217;t think we8217;re headed to recession, but no question we8217;re in a slowdown.8221;
Since its birth, Google has been in a perpetual growth spurt, posting insanely impressive metrics of all sorts 8212; from its share of Internet searches to profits8230; Google8217;s paid clicks 8212; the number of times Web surfers clicked on ads served up with a search 8212; fell 0.3 per cent between January 2007 and January 2008, even as the number of searches rose 40 per cent in the same period. As recently as August, Google8217;s ad clicks were rising at a 60 per cent clip. Google8217;s click-through rate 8212; the percentage of ads that get clicked on, and hence a measure of consumer follow-through on searches 8212; was also down sharply in January.
These numbers tell us something troubling about Google, and about the economy at large. Google became the Net8217;s 800-pound gorilla by defying underlying growth trends of the larger commercial universe. But now, says Andy Kessler, a Silicon Valley hedge-fund manager turned author, 8220;Google is big enough to be affected by cyclical economic forces.8221; Since it peaked at 747 last November, Google8217;s do-no-evil stock has plummeted 37 per cent, erasing 86 billion in value8230; If the economy is grinding to a halt, one would expect clicks of all categories to decline8230; If even Google is showing a decline of economic activity in a big chunk of its domain, it can mean only one thing: We8217;re in the portion of the economic cycle that rhymes with shmashmession.
Excerpted from Daniel Gross8217; 8216;The Unspeakable R Word8217; in Slate, March 1
