Timberline Interactive

This should be a thrill to investors and soap-opera lovers alike! Google's Q1 2008 earnings call webcast will be streaming across the internet today at 1:30 pm Pacific time (4:30 pm Eastern time; you midwestern and mountain folks can do the math).

Why, if we don't own GOOG, should we care? Because it raises the curtain on a big question: Where is the online ad market going?

After quarter after quarter of torrid growth -- and a fourth quarter 2007 surge of 25% -- Google reportedly slowed to a crawl early this year. ComScore has been tracking anemic 2% to 3% growth in paid ad clicks, and although the firm took heat for the accuracy of their numbers, given the abruptness of the turnaround, many analysts have come around to the view that the numbers are real, and that they point to 1) the slowdown in the overall economy, and 2) normal post-holiday seasonality to which, up till now, Google has been immune.

While more experts accept the notion that fewer people are clicking ads, the other unanswered question is about ad quality. Google and Yahoo have been retooling their ad-serving algorithms to focus on higher-quality ads and higher-quality clicks (the latter by weeding out fraudulent and accidental clicks, better policing the quality of the content networks, etc.). If Google is, as a result of higher click quality, attracting a higher cost-per-click, the earnings machine may still be operating at full tilt. We'll know the answer this afternoon!

* (CNN Money sums up the story nicely.)

Say goodbye to 10-cent minimums on Yahoo. The company has started tweaking the minimum bid requirements for its Yahoo Search Marketing text ads, so they will now be calculated based on market demand and ad quality scores.

Mediapost's Tameka Key quoted a Yahoo spokesperson as saying the move was designed to "More to more closely align keyword bids with the value and relevance associated with those keywords."

On SearchEngineLand, Barry Schwartz offered some screen shots of the new alerts you'll see for any key terms affected by the change. He also provided a number of guidelines for keeping your click costs low and your ROI high.

As with past minimum-bid increases, few high-volume positions will be affected by the change, as market forces have already pushed the effective key terms well above the 10-cent floor.