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Over the last year, Google’s (GOOG) shares have dropped from $724.80 to just above $300. There is an argument to be made that they could go much lower, perhaps down to $250. The stock has not traded there since the Spring of 2005.

If internet mogul Nick Denton is right, advertising could drop 30% to 40% next year. Quoted at one of his websites, Valleywag, he said "Analysts project a single-digit increase in online advertising in 2009; we should be so lucky, according to Denton, who writes that a 30 to 40 percent decline in all advertising spending, online and off, next year — a scenario supported by analyses of economic recessions from Sweden to Indonesia."

Results from Yahoo! (YHOO) and AOL show that internet display advertising is growing in the low single digits, at best. AOL’s revenue fell in the last quarter. Niche internet companies like Conde Nast are saying that revenue will grow in high single digits to low double digits next year. Unless it can buck the industry trend, that is not likely.

The argument that Google bulls would make is that search advertising is a much more effective way to reach consumers than internet display, TV, radio, or print. The results of Google’s revenue growth and earnings have certainly proved that for the last four years. If marketers cut all other forms of advertising, they have to keep Google because it is the one medium which is a demonstrated long-term performer.

What is not being taken into account about Google’s 2009 numbers is that nearly the entire base of large marketers are watching their businesses fall apart. Just today Best Buy (BBY) announced that its sales are in free fall and that it faced a remarkably poor 2009. The company’s CEO was quoted as saying "Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we’ve ever seen."

What is bad for Best Buy, the nation’s largest electronics retailer, is bad for Hewlett-Packard (HPQ), Dell (DELL), and Apple (AAPL) which are all seeing their shares drop today.

Moving beyond the large retail sector, car companies have already slashed marketing budgets as have a number of large financial firms which are losing billions of dollars.

Google may be faced with such a profound and broad collapse in the fortunes of most of its customer base that being the best of the best won’t matter much.

Douglas A. McIntyre