Do We All Move As Google Moves?

Last week Google (NASDAQ:GOOG) announced changes to it’s referral program which Darren Rowse wrote a heartfelt open letter about. The net result of the change was that a publisher is located outside of the U.S., they would not be eligible referrals. Google then changed their mind (a smart move) and is now paying out the referral commissions based on where the new publisher is located not where the referral publisher is located and Rowse wrote a follow-up.

Today I received a note from Google that they are changing the referral amounts for Google Pack and for Firefox referrals for users in China. What’s interesting is that I assume everyone who wants the Google Pack already has it and that Google would want to increase the commission to increase the publishers that are using the program. The best part of the note was the following:

We understand that these changes may decrease revenue for some of you currently participating in these referrals programs.

I headed over to affiliate master John Chow and he commented on the change, "I believe Google’s trouble started when they made their ads less clickable. Many AdSense publishers saw their revenue dropped heavily because of the measure. Markus at Plenty of Fish reported that his click rate has declined by 60% in the past two months. If the AdSense publishers aren’t making money, it means the AdSense program isn’t making money." For a site like Plenty of Fish to drop by 60%, that’s got to be a large hit for Google as well. Maybe that’s why Incredimail was reinstated so quickly?

And now the stock is tanking — not so much due to Google but due to the general market. Will we see lower payout percentages on Google AdSense for the basic ad program? I’d say yes — remember that Google hides the bottom line numbers from us and can change it at any moment and if they want better earnings, they could just ratchet it back a bit. Larger players like MySpace have signed deals so I am sure their payout percentages won’t change and the smaller publishers will take the entire hit. Chow agrees here and notes, "My gut feeling tells me that Google revenues are down and that they’re doing everything possible to post a good quarterly report, even if that means taking it from the affiliates who help them build their business."

And a stock that has dropped 160 points since January 1 has got to be scaring some at the Googleplex. John Battelle wonders what the drop is doing to the Google culture.

Do you believe that the Internet moves as Google moves? Are there other companies you see that might shift confidence besides Google?