Google Quarterly Report Surge WTF

According to the NYTimes Google reported quarterly profits once again. How is it that the economy is taking a pummeling while this giant continues to make mad money? The housing sector is going to shit, people are getting laid off, and those who stay in the game work less at a lower pay.  The fact that Google was able to make a killing can only mean one of the following three things.

1. Advertising spend online continues to increase during recession at a higher rate than expected. Why would someoe want to advertise during a recession? Simple, online advertising unlike traditional advertising is based on performance. You can measure ROI directly without wishy washy market research and Nielson ratings with TV/ Radio.

2.  Google continues to slap anyone who tries to game the system resulting in more profits for them. Follow me on this, imagine all the bright affiliate marketers, small mom and pop shops, etc who try to compete with PPC. They get destroyed leaving the huge corporations who don’t need to game, but continue to pump money. I know this one doesn’t make sense outright so here is how I will explain it. With less players in the PPC game, less competition, and less efficiency. In an inefficient market Google not the advertisers win.

3.  Google changing the click-able area in content ads really did work. I originally thought this may hurt google since less revenue, but in fact it did the opposite. With less clickable space there is less accidental clicks. This improved the quality of the content network and brought advertisers back. With less clickable area the publishers receive less clicks and lower revenue. The advertiser wins the publisher gets screwd.

This is my take and of course it is very possible I am completely wrong, but my observations seem to support my ideas. Let me know if you think it is the case of any of these three scenarios or something else?