Google's 'Inside AdWords' blog has just completed a series of short posts about how AdWords and Analytics can best be used together. More and more search engine advertising campaigns through Google AdWords are linking in the Google Analytics data as well to get a better insight into how keywords are performing once searchers visit a site. These 4 posts by Google cover tips and advice about using these 2 tools together and include links to additional resources.

The first article introduces the series of articles and provides links to a series of short videos on how to use Google Analytics. The second post looks at linking the AdWords and Analytics accounts and then how to track revenue generated by the PPC adverts.

The third blog article explains how to identify the keywords that lose money and how to calculate the ROI of a campaign. The final article covers ways to find the best keywords and ad positions that drive revenue.

Closely following the publication of Google's and Yahoo!'s financial results for the last quarter comes Microsoft. Widely reported in the press, including by The Wall Street Journal, the software giant posted a 32% drop in profit and the first decline in quarterly revenue in its 23-year history as a public company, due to the global recession having an impact on nearly every segment of their business.

Microsoft has blamed the 16% drop in sales for their Windows software on the reduction in the PC market within the consumer and business sectors, although there may also be an element of customers now waiting for the new improved version of Vista to appear before the year end.

More notably for Microsoft's Internet-focused business was the more than doubling of operating losses from the online services division, to US$575 million. Microsoft is still desperate to improve its competitive position in Internet search and advertising against Google, but has made little progress by the most important measures. The company has continued to hire within its Internet group, even as it has made staff cutbacks elsewhere in the company, and clearly hopes to see a turnaround in this sector soon, but continues to suffer from a low, and declining, share of the search market.

Both Google and Yahoo! have recently published their quarterly financial results, with some contrasting fortunes as the economy starts to have an impact on the search business.

Google released their results last week which were widely reported in the media - including by Information Week - and they were slightly better than analysts expected. Revenue for the first-quarter of 2009 was US$5.51 billion, up 6% year-on-year but 3% down on the last quarter of 2008. Their earnings-per-share figure was also better than anticipated ($4.93) which indicated that cost controls are working and the company is coping with the downturn so far.

Yahoo!'s quarterly results met the expectations of the market and the company said that economic conditions remained challenging, as revenue from advertising on Yahoo! websites and its partner websites declined during the first quarter of 2009. In the first quarter of 2009, Yahoo! generated revenue of US$1.58 billion, down 13% from the same period in 2008, with a net profit of US$118 million, down from US$537 million a year earlier. As reported by Reuters, Yahoo! also said it would cut 5% of its global workforce, following the earlier cuts announced in 2008.

Google Labs is a fascinating part of Google's website, showcasing projects that are under development to improve the search experience as well as many of the other services now offered by Google. The BBC reports on several new services that are being tested - Similar Images and Timeline Search, plus Google has also announced the new Profiles service.

Similar Images allows users to sort through the results of an image search more easily by clicking on a link so that in cases where a variety of images may initially be displayed for a search, the query is expressed visually as an image and not text to focus the results. Google has been spending a lot of development time on improving the image search engine and recently introduced a colour-match function within the Image Search tool to enable users to find similar colour-themed results.

The Google News Timeline tool allows searchers to view a history of articles, photographs and videos for their chosen search, arranged by date, week, month or year. Users can also refine the search to specific magazines, newspapers or blogs as well as results from Wikipedia, movies, music or even video games.

Finally, the Google Profile is a new option of Google account holders to control how they present their details on Google products to other Google users. Users control how their details appear and they can add more information about themselves, along the lines of a very basic social networking site. In this way, users with a Google profile can share web content in one central location, such as links to a blog, online photos, and other profiles such as Facebook, LinkedIn, and Twitter.

An online survey conducted by AdWeek with users of the social networking site LinkedIn assessed how the current economic situation may impact the role of online marketing. Over 4,300 respondents too part in the survey at the end of March and when asked "How will the economic downturn most affect advertising?", 22% said 'there will be less advertising'. Another 8% said 'advertisers will play it safe' but the majority responded to say that the main effect would be a form of evolution that makes advertising more adaptive to changing conditions.

Within this group, 30% of respondents considered that the economy would lead to "better targeted ads to improve ROI," 23% anticipated that the "shift to online would accelerate" and 15% think "ads will follow traffic to social media." When the responses are broken down by job function, there was a notable gap between people in "marketing" and those in "sales": with the latter being much more likely than the former to choose "better targeted ads to improve ROI" (36% vs. 23%) as the recession's pre-eminent effect on advertising.

A full report on the survey and the breakdown of the results by different categories can be seen on LinkedIn (requires user login).

Google has made a number of notable changes to their search results. The first, as described by Search Engine Land, has increased the frequency of local business listings being displayed within the first page of results. Whereas previously the small map and 10 business listings only appeared for popular search terms combined with a location in the search query, Google has now started to include these results for these common terms even if the user has not included a location in the query.

This is being done when Google recognises a term that has local search intent and combines this with the identification of a user's location by their IP address. The mapped results are not shown at the top of the search listings - which happens if a search is made with a locational term - but the inclusion within the results aims to improve the local search focus for users.

It's by no means a perfect solution for searchers and much will depend on the IP address of a user's ISP (Internet Service Provider), but this change will have a big impact for local businesses who will now get a further opportunity to appear within the search results list for a potential customer and highlights the importance of getting an optimised local business listing set up with Google.

The second recent change to the ranking results has been reported by the Google Webmaster Blog and concerns the 'sitelinks' that are often displayed under a large or popular website's listing so that users have more opportunities to click directly into a prominent section of the website. Until now, sitelinks have only ever appeared on the first search result, and so at most one site could have sitelinks per query.

Google has now introduced an expansion of these sitelinks into a single row of links which will be displayed for results that didn't show sitelinks before, even for results that aren't in the first position. This means multiple results on one query can now have sitelinks and up to 4 sitelinks can show up right above the page URL, instead of the usual two columns below the URL of the first result.

This will help to show users some relevant sub-pages in the site and give an idea of what the site is about. Comparing the sitelinks that appear for each result can even illustrate the difference between the sites. Google says that, just like regular sitelinks, the new one-line sitelinks are generated algorithmically and the decisions on when to show them and which links to display are entirely based on the expected benefit to users.

For webmasters, this new feature means it's possible that their site will start showing sitelinks for a number of queries where it previously didn't and although site owners can't tell Google which links to include, the can block links they may not want to show, through access to the Google Webmasters Console. However, in most cases this change will probably increase the visibility of, and traffic to, a website, whilst also improving the experience of users, so it's another change that can support the search marketing for websites.

As widely reported in the press, Yahoo! and Microsoft have started talks again over a possible search engine partnership, less than a year after Microsoft failed in a $US44 billion takeover attempt of Yahoo! At this stage there is no suggestion that a takeover bid is on the cards again, but the two companies are believed to be discussing ways they can link up their resources to combat the ever increasing market share of Google.

More information and possible outcomes from these talks will no doubt follow and there remains plenty of life left in this story.

The Australian Government has announced plans to build a national broadband network as a major infrastructure project to improve Internet access and speeds for the future. As reported by The Australian, the announcement was made by Kevin Rudd, outlining the plans to create a government-owned company to develop and run the National Broadband Network.

Having rejected a number of proposals by corporate contractors to develop the network, the Government has now decided that it will make the initial investment through a joint-company with developers, but intends to sell its interest within 5 years of the network's completion, depending on market conditions and national and identity security considerations. The project will invest up to $43 billion over eight years and the Government will initially put $4.7 billion to the project. Other funding will come from private investors, including through the issue of bonds to the general public.

The network will go beyond 'fibre to the node' to provide 'fibre to the premises', which means laying real optical fibre direct to properties rather than just a down the street. According to the Government, the network will connect 90% of all Australian homes, schools and workplaces with broadband services with speeds of up to 100 megabits per second, 100 times faster than those currently used by many households and businesses. It will also connect all other premises in Australia with next generation wireless and satellite technologies that will deliver broadband speeds of 12 megabits per seconds.

The project will directly support up to 25,000 local jobs on average every year during the eight year construction period and work is expected to begin in July, in Tasmania. Comment on the plans and the likely outcome has been made by The Sydney Morning Herald.

A concise article from Advertising Age (subscription required) outlines the different stages of search over the past 15 years and what the new 'search 3.0' means for advertisers. The new era is one that combines the traditional search experience with social networks and user generated content to help refine the results and feedback for the searcher. As the article says, finding the right content is as much about whom it comes from as where you find it. For many companies and brands, this creates a host of new challenges and opportunities beyond the traditional search channel.

Search 1.0 is now seen as the first era of search engines which were focused on pages and the content within them. Results were ranked based on the number of times a particular keyword showed up in the page content or meta data, so that SEO (search engine optimisation) began as a core method of online marketing.

Search 2.0 is now seen as the period following the launch of Google where the focus shifted to the search network due to Google's use of PageRank and the importance of links between sites to establish authority. During this period, quality also became important with the relevancy of a landing page to a search query, which also became a key factor within Google AdWords.

With the new era of Search 3.0, relevance is now seen as not only what's on a page and surrounds it (links to it) but how that data also relates to the searcher's personal network. As more and more people connect to each other through social networks, the resulting social graph with content, links and comment is proving extremely powerful in helping users filter the data coming at them.

An example of this is YouTube, which started as a service that allows people to post videos but has since become the primary source that people turn to when they want to find video content on any subject imaginable. Also Twitter started as a way to communicate short personal status updates to friends, but is now becoming a search engine i its own right that allows users to tap into what's going on now.

The impact of these changes for brands, marketers and advertisers has also changed, according to this article. Whereas 1.0 was about making sure the information within individual pages of your site could be found, and 2.0 was about making sure your site was optimized within a network of related sites, now Search 3.0 is going to be about finding ways to reach individuals by using their social graphs.

That means reaching people where they're already sharing, linking, publishing and tagging, and becoming another node on their social networks by interacting with them and adding value to their experiences online. It's potentially a more difficult and time consuming way to channel a message to a target market but one that needs to be understood and developed in the new online environment.

There have been reports and rumours circulating for some time now about a new search engine that's being developed by Microsoft. Now Advertising Age reports that Microsoft have briefed their agency, JWT, to develop a new brand building campaign for the relaunched search engine, which may be called Kumo or retain the Live Search name.

The report suggests that the advertising push could be valued at US$80-$100 million to begin in June across online, TV, print and radio. Whether this spend will make much of a dent in Google's market dominance and halt the declining usage of Microsoft's search tool remains to be seen and even if the campaign does get people onto the new search engine to try it out, the experience will need to be something special to break the search habits of many web users.

The latest issue of the monthly Web Marketing newsletter has been published, covering some of the recent stories on web search and online marketing trends.

This month's edition looks at the role of the Title tag in search engine optimisation and how this should be used to help achieve ranking positions and also encourage visits to a website. It also considers the Keyword Positions Report within Google Analytics and how this can be a benefit to Google AdWords advertisers. Staying with Google AdWords, the third article looks at the new 'interest-based' advertising option that's just been launched in beta by Google to help advertisers improve their targeting opportunities.

If you want to sign up for future issues of this newsletter, please do so by using the form at the bottom of this page. To view back issues of this newsletter you can see the archive by date or by subject.