Google Share Price Versus Epc

[ParkLogic]

For many years I’ve been tracking the Google share price (GSP) versus an average earnings per click (EPC). It’s been one of the more interesting sets of simple analysis that I’ve conducted and it has suggested some quite unusual results.

Please excuse the resolution of the graph (it was REALLY BIG in Excel). The time line goes from 1 Aug 2009 until 1 Jun 2014. The Red Line is the 56 day moving average for the GSP while the blue line is the similar trend line EPC for a statistically sound set of domains. I chose a 56 days moving average to smooth out many of the variations that quite often distort data for analysis.

What’s interesting about the graph is that it’s really in two sections (marked in green and red). The green area clearly displays a correlation between the ups and downs of the share price and the EPC. There may be some exaggerations but generally speaking the curves follow similar shapes to one another. In fact, this particular domain portfolio could have been used as a predictor of the Google share price.



This seems a little strange given that Google has always emphasized that traffic quality is what influences the EPC. It’s clear that during the “Green” period of time that the treasury department had more sway over the EPC rates than the traffic quality area.

So now we are left with the “Red” zone from around 1 Jun 2012 onwards. Something really strange happened to this portfolio. For a start, there was a large peak followed by a dramatic drop that had nothing to do with the GSP.
I could be correct but from memory this was the time when the first stages of the roll-out of the Google DRID (Domain Registrant ID) was implement in the industry. The cynic in me says that the new technology was implement with great payouts and then the EPC was dramatically ratcheted back.

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