Letters to the Editor
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@aveutter
I disagree. The thing about Google's model is that it can survive things like click farms, because Google's customers can measure what happens when people click through. Are people buying stuff? Looking at the pages you want them to look at? Etc.
If you are getting a ton of clicks with no benefits to you, you (and everyone else) are going to want to pay less per click. But that might be just fine with Google- as their variable costs of serving an ad are basically $0, they'll pretty happily take half the price on twice the clicks.
Advertising effectiveness has always been very difficult to measure quantitatively. Online advertising changes that fairly significantly.
That said, I think GOOG is overvalued myself; it's just too hard to predict what's going to happen in the next 5-10 years. Then again, pretty much every time I've bet against Google by not buying its stock, I've been wrong...