DID Google, the world's largest web-search engine, peak last November 6th, when its share price hit an all-time high of $742? Some people on Wall Street seem to think so. They now value the firm at around 40% less. Part of the blame belongs to the general turmoil in the stockmarket. But the bigger part, investors fear, is that Google, at the ripe old age of nine, might already be over the hill.

The scare started when comScore, a research firm, reported in late February that Google's “paid clicks” had decreased by 7% during January, and were flat compared with the same month a year earlier. In other words, surfers who searched the web via Google itself, or who visited websites that belong to Google's advertising network, clicked slightly less frequently on the little text advertisements that Google often places on these pages. The idea that this disappointment was some sort of seasonal blip faded on March 26th when comScore reported that the numbers for February were no better.

Alas, as so often in the nebulous business of online advertising, the devil is hiding somewhere underneath the numbers, and probably planning some mischief. The first possibility is that web users performed fewer web searches, leading to fewer results pages, ads and clicks. This turns out not to be the explanation. Web searches on Google grew in January, and dipped only slightly in February. Google's market share of searches also continues to grow. This means that the ratio of paid clicks to searches dropped even faster than the number of paid clicks: it was down by 16% in the month of January.

Perhaps America's foreclosure crisis and fear of recession among consumers have caused a downturn in advertising? That is possible, but unlikely, at least so far. eMarketer, another research firm, projects that online advertising in America will grow by 23% this year, economic troubles notwithstanding, because the measurability of the medium is too compelling for marketers to ignore. More to the point, users of rival search engines such as Yahoo! or MSN actually clicked more often on search ads during January and February. For the explanation to be economic, consumers using Google would therefore have to be more worried than those using other search engines. This makes no sense.

According to comScore, the likeliest explanation is instead that Google itself is to blame—by, paradoxically, increasing the quality of its ads. Google does this in two ways. First, it offers fewer ads on each results page, and often none at all. This reduces visual clutter and pleases both users and any remaining advertisers. Second, Google seems to be trying harder to weed out those advertisers who bid low in the auctions it conducts for advertising slots linked to particular keywords. Low bids indicate that advertisers do not expect the ads to generate much business. With less space devoted to ads, and only higher-bidding advertisers getting through, there are fewer ads to click on.

But would users not click just as often, or even more often, on those remaining ads, since they are now presumably easier to see and more relevant? Perhaps not. From Google's point of view, a perfect system would result in each ad not only being clicked each time but also leading to a sale by the advertiser. Google interprets lots of clicking without subsequent purchasing to mean that its ads are not very good.

So if the drop in paid clicks turns out to coincide with more conversions into actual sales, Google's revenue for each individual click ought to shoot up, since the marketers would be prepared to pay more. That in turn might mean that aggregate revenue growth for Google could still be healthy. In a nutshell, this is what drove Google's revenue last year: it grew by 56% on the back of a 21% increase in revenue per paid click. Since Google does not disclose its revenue per click, however, Wall Street won't know whether the click data are good news or bad until April 17th, when Google reports on its first quarter. Until then, the case of the mysterious missing clicks remains unsolved.