Google grows by 51 per cent, and it is a crisis. Really? Hang on; isn't this just a case of Wall Street's over-inflated expectations not being met? On the face of it yes — most companies would like to have Google's problems — but it is the first time that the search engine giant has fallen shy of analysts's forecasts.

The nagging worry here is that we are somewhere near the top of the market; the company that currently supports the inflated web 2.0 valuations is Google. Yahoo! is struggling, and it is not clear it can reinvent itself, Ebay is moving on to a new chief executive after the Skype debacle.

Google is not even blaming the US economy, but there is plenty to worry about before any US downturn hits. It is unsure if it can make money from placing ads in social networking websites, which were supposed to be the next big thing. It is also far from clear that it can generate cash from video advertising, and turn its $1.65 billion bet on YouTube into another firehose of profit.

The search engine said that it expected advertisers to hold their spending with Google, and make cuts elsewhere. Really? Advertisers and media companies might start waking up to the limits of online advertising: it does not deliver block audiences like Coronation Street or the Daily Mail can. It may never deliver video like television, or audio like radio; it can't generate number one hits like The X-Factor can.

That does not mean Google, and indeed online advertising, will not be significant. It is still growing faster than conventional advertising, but it is easy to overvalue it, too. It is instead part of a modern advertising campaign, which means that online advertising in general and Google in particular is not immune to cutbacks when economies slow. But Google's massive valuation does not allow for mistakes.

As Sir Howard Stringer, the Sony chief executive, warned in Davos, too many web businesses are relying on advertising to deliver revenues. We have seen that kind of optimism before — sometime in 1999.

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