Does the rapid descent of Google’s stock mean anything? Nobody knows.

If stock price trajectory is any indication, Google has literally had an up-and-down past 12 months (see graph below). The question is, is the stock price actually reflective of how Google is doing?

A year ago the stock was just below $450-a-share, about to begin a rapid ascent to an apex near $750. While that was only a few months ago, the stock today slid below the $450 mark once again.

The company is still utterly dominant in both online search and online advertising. Just five days ago sites around the Internet were in “awe” of the fact that Google once against increased it’s search share in January over where it was at in December.

Yet, just days later when reports indicate flat growth for click-through rates on advertisements the tide quickly shifted to “disaster“, and the stock plummeted near 8% at points today.

While some are trying to argue that the click-through numbers are down because the economy as a whole is down, this seems rather silly. Those people who click on ads of course aren’t actually paying anything when they click on them. If you follow that logic, people are clicking on these ads less because they are less interested in buying (in a slumping economy) what the advertisers are selling.

Yet, the amount of traffic Google is sending to retail sites from their search engine is actually increasing as Bill Tancer notes today.

Google, like every other company, can certainly be adversely effected by a poor economy. However, the mercurial reactions of the stock market and blogosphere leading some to think that the company is somehow weak going forward seems suspect.

Online advertising grew 27% in 2007 – with an even better increase of 28% in the recent 4th quarter according to the IDC. Google, despite the dip here and rise there, is simply the dominant force in that market.