Google is mortal, says Sorrell
Mark Sweney

guardian.co.uk,
Friday February 29 2008

Sir Martin Sorrell: called Google a 'frenemy'.

WPP chief executive Sir Martin Sorrell has described Google as "mortal" following an uncharacteristic blip earlier this week in the search engine's performance, and said he backs a merger of Microsoft and Yahoo to "balance" the internet advertising market.Sorrell, speaking after the advertising and marketing services company posted slightly stronger than expected results for 2007, has always been wary of Google, dubbing it a "frenemy", to reflect the industry's concern that it is as much a hindrance as a help to established media businesses."Microsoft/Yahoo is a good move as it makes the market more balanced, which is a good thing," he said.

"It would make one strong competitor and one stronger [ie Google]. The big question is how Microsoft would handle it [a merger] if it goes forward".He dismissed concerns some quarters that in Europe the potential combination of Microsoft and Yahoo might raise competition issues in the online display advertising sector.Sorrell also had a view on the recent slump in Google's share price after comScore figures showed a drop in the number of clicks on ads next to the search engine's search results. "It is nice to know that Google is mortal," he quipped. "It is all relative though, isn't it? What has their growth been [over the last few years] - 46% and 30% or so? I'd like to have that problem".He added that the biggest issue facing WPP was the "intellectual" challenge of integrating, understanding and keeping pace with the digital world.In total, WPP spent £579m on investments and acquisitions in the digital space last year including 24/7 Real Media, Blast Radius and Schematic, the agency behind ITV.com's media player."Intellectually it has to be the digital area [that poses the biggest challenge]," he said. "It continues to be intellectually the most difficult thing.

In 2007 WPP boosted its "broadly-defined internet-related revenue" to $2.8bn (£1.4bn) or 23% of worldwide reported revenue.

However, "narrowly defined internet–related revenue" was $1.5bn or 12% of worldwide reported revenue, ahead of the global media average of 10%.

Sorrell added that a potential "pause" in the Chinese economy after this summer's Beijing Olympics would provide breathing space for WPP to increase investment in the Asian tiger.WPP, which already derives 15% of its global revenues from China, has seen year-on-year growth of 31% in China and 23% in India, said Sorrell."The rate of growth can't carry on forever, there has to be some relaxation and the natural time is after Beijing," he said.
"If there is a pause we would take the time to invest in China more. The long-term growth prospects are strong".

This article is about how Google is declining in revenue and visitors to the site.