According to HitWise, all is not well in the land of paid search:
Hitwise data indicate that the share of search traffic coming from paid listings is decreasing at the expense of organic traffic. In the four weeks to May 9, 2009, 7.25% of search engine traffic to All Categories of websites was from paid clicks. This compares to 9.84% in the same four week period in 2008 – representing a 26% decline in the share of paid clicks. This trend is apparent across 16 of the 17 Hitwise parent categories (i.e. Automotive, Food and Beverage, Health and Medical, etc). The only category that didn’t see a decline in paid traffic was Education, which received 1.45% of search visits from paid clicks compared to 1.39% last year.
….Referrals from search engines continue to climb but the proportion of clicks going to sponsored or paid listings is decreasing. This is no doubt a result of cutbacks in marketing spend due to the recession.
Here is where Google’s 2004 IPO claim to not manage the company for quarterly earnings will be tested.