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Sunday, February 3, 2008

Google’s 4th Quarter Earnings Not Up to Scratch

Posted by @ 11:41 pm

Google’s much awaited 2007 fourth quarter financial results have been released and according to Google CEO Eric Schmidt:

“We are pleased with our performance this quarter, it reflects strong momentum in our core business, growing receptivity to our new business initiatives, and improved discipline in managing our operating expenses.”

However, Google shareholders didn’t have the same point of view, Google shares fell 6.7 percent at the open of trading last Friday (1st February), as investors decided 52 percent sales growth wasn’t up to their expectations.

Google earned $1.21 billion, during the final three months of 2007. That’s a 17 percent improvement over net income of $1.03 billion in the same period a year earlier. However, it’s the first time Google’s quarterly profit has climbed by less than 25 percent since they went public nearly 3 1/2 years ago.

Precisely what caused the letdown is likely to be a matter of intense debate. However, Company co-founder Sergey Brin shed some light saying that Google didn’t reap as much revenue as management predicted from its advertising partnerships with online social networks like MySpace.

With talk of a pending recession in the US, and Google failing to show growth with non-search ad channels, the company could face further declines in its stock value over the coming months.

It makes you wonder if Google will be able to sustain the strong growth they have had previously?

Courtney Mills Courtney is an online marketing and communications specialist at ineedhits - a leading search engine marketing firm with over 16 years experience. Courtney has been living and breathing online marketing for over 5 years. She specializes in web and communication marketing, while providing news and opinion to online marketing communities.

View Courtney Mills's profile

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