Tuesday, June 2, 2009

The 'Sucks' Indicator

In the true traditions of in depth analysis I did a simple survey on Google Trends for the search term "sucks" and an associated company name. I initially wanted to look for attitutes to Google's Adsense program but there wasn't sufficient data to return an answer (censorship or simply a win-win product?), so the search was broadened to improve results.

The first comparisons were between Google, Microsoft and Yahoo. Google experienced the most 'suckage' by virtue of its size. The 2008 spike may have corresponded to the changes in its advertising TOS, but it didn't appear to impact the company over the long term and in general, the company has been irking people less since the start of 2006

Microsoft has been steadily improving while Yahoo has headed in the other direction; one only has to look at the comparison in the two's stock price to see how each has fared with investors.

The rise and fall of Crocs (CROX) has made for interesting viewing (assuming you hadn't ridden it up and back). Crocs peaked in search during July 2007 before plummeting; interesting headline from September 17th which came a month before the stock price collapsed.

Unfortuntely, applying the 'Sucks' thesis to teen fashion didn't return an awesome list of results. In the broader terms of search, Abercrombie held top position (and was used as a marker for all comparisons) but is facing pressure from Hollister. Juicy Couture has seen steady growth, albeit from a lowly position. Certain brands like Diesel and Hurley were excluded where there were obvious multiple meanings and the fashion brand did not represent the dominant search term.

One thing Google Trends shows nicely is the various seasonal shopping peaks; look at the difference between boom loving 2007 (denial) and the crisis weary 2008 (acceptance). Minor peaks are seen for Spring and Fall - even for Spring 2009. What will Fall 2009 bring?

On a closing note, although weaker than Abercormbie and Hollister, Urban Outfitters was able to maintain the majority of its (lower) sales in 2008 from 2007 and hasn't suffered to the same degree as Abercrombie or Hollister. Is Urban the new teen fashion star?

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts, and stock charts website

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