Google misses profit expectation, stock plunges
Faith in Google's financial strength, restored somewhat last quarter, turned out to be fragile as the company reported earnings Thursday that fell short of analyst expectations.
Google's net income rose 35 percent to $1.25 billion for its second quarter, the search giant said. Excluding various items, it reported earnings of $4.63 per share, short of the $4.74 expected on average by analysts surveyed by Thomson Reuters.
Google revenue continued its upward trajectory in the second quarter, but not to the satisfaction of Wall Street. (Click image to see larger version.)
(Credit: Google)In after-hours trading, the stock had dropped as much as $60, or more than 11 percent, according to CNBC. However, the stock recovered somewhat, down $46.31, or 9 percent, to $478.13.
The company's revenue increased 39 percent to $5.37 billion. Excluding $1.47 billion in commissions called traffic acquisition costs, the revenue was $3.88 billion.Revenue excluding commissions was $3.7 billion during the first quarter of 2008.
Analysts had expected revenue, excluding commissions, of $3.9 billion.
"Strong international growth as well as sustained traffic increases on Google's Web properties propelled us to another strong quarter, despite a more challenging economic environment," Chief Executive Eric Schmidt said in a statement. "As we continue to focus on innovating in our core business of search, ads, and apps, we also look forward to enhancing the experience of our users and expanding the reach of our advertisers and partners with new technologies and formats, particularly as our integration of DoubleClick gains momentum and creates new opportunities in display advertising and elsewhere."
Advertising overall has suffered from the current economic slowdown in the United States, but Google trounced pessimistic expectations for its first quarter and said it saw no evidence of trouble.
The Mountain View, Calif.-based company gets most of its money from ads appearing next to search results. Google dominates the search-ad market with 77 percent share of revenue by one estimate released Thursday.
Stephen Shankland writes about a wide range of technology and products, but has a particular focus on browsers and digital photography. He joined CNET News in 1998 and since then also has covered Google, Yahoo, servers, supercomputing, Linux and open-source software, and science. E-mail Stephen, or follow him on Twitter at http://www.twitter.com/stshank. 
No wonder the economy is collapsing, the F***ing greedy bastards are destroying American business, eliminating all of the jobs, liquidating all the assets, to put money in their own pockets. When they completely crash the market, maybe the F***ing daytraders will have to get a job and actually have to work for a living, instead of suckling off the work of others.
- by krishcnet123 July 21, 2008 5:19 AM PDT
- It's just sad to see market analysts and even journalists jumping on to the bandwagon to bring down Google. I mean, what do they want? Do they set such standards for themselves in the first place?
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(5 Comments)It's so easy to sit on the fence and make atrocious comments. Google is a cut above the rest and will continue to be so. The barkings and mutterings of sophisticated, self-glorified mavericks only adds to sound pollution! Thnx.