by mstephens7

More evidence that the ripples from the subprime mortgage mess are spinning out and beginning to affect web destinations. I’ve been writing about this for the last couples of weeks (see Storms Ahead for Real Estate Sites and What the Subprime Mess Means for Real Estate 2.0). Others seem to be jumping on board.

Google sees Web search less exposed to mortgage woes | Business News | Reuters.com

A meltdown in subprime mortgage debt — made to borrowers with weak credit histories — triggered a global scare over banks’ exposure to a wide range of high-risk debt and stoked recession fears. The advertising and media industries are just beginning to feel the pressure, but some outlets may be more vulnerable than others if a wider swathe of financial services advertisers cut spending.

Plugged In – Barron’s Online

Critics such as Barron’s Roundtable member Fred Hickey are convinced that not even GOOG can avoid the impact of the credit mess that has rocked financial markets and prompted the Fed to slash the fed-funds rate by a half point. In a recent edition of his newsletter, High Tech Investor, Hickey wrote that Google’s advertising revenues are likely to take a hit next quarter and beyond.

Silicon Alley Insider: Google: Mortgage Ads Are Down — Except For Ours

But for argument’s sake, let’s say the ad slowdown will miraculously miss Google entirely. Even then, it’s still going to beat up a lot of Web players with second tier search businesses (IACI, MSFT, YHOO), or who are more dependent on display advertising (YHOO again).

Internet Outsider: Internet Recession Watch: Google Sees Ad Cutbacks

We continue to believe that we may be in the first stages of a cyclical downturn for advertising and the Internet sector–one that will affect not only start-ups and second-tier players but majors like Google (GOOG), Yahoo (YHOO), AOL, et al. Such downturns do not begin suddenly, and they are not instantly obvious (except in hindsight). Rather, as with the housing market, the environment changes gradually, over many months, with early signs slowly becoming a steady torrent of bad news.

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