Feeds

Google shares clobbered after earnings miss

Profits slide

The next step in data security

Google's stock fell 15 per cent in after-hours trading after it posted earnings that slumped below analyst expectations.

At least it's in good company - Yahoo! and eBay have also been punished recently for posting what by any standards are healthy results. But Google's profits declined from the previous quarter, and that was enough to send its shares into a nose dive.

By some estimates Google could see $18bn wiped off the value of the stock tomorrow morning.

Sales at the advertising giant in Q4 rose 86 per cent year-on-year, with Google grossing $1.92bn. Net income was $372m, down from $381m in Q3. "Traffic acquisition costs" (TAC), which Google defines as money it shares with its Adsense partners, cost the company $629m, or exactly one third of its advertising revenues, leaving usable revenue at $1.29bn. Google blamed a higher tax rate, and higher than expected operating costs for the reduced profit. However, unlike most companies, Google fails to provide earnings guidance, which can help smooth out the bumps.

Revenue from Google's own properties generated just over a billion, or 57 per cent of all gross income, with its Adsense program snaring 42 per cent.

The former, which provides Google with much higher margins than the latter, rose 112.5 per cent year-on-year, compared to a 72.9 per cent increase in AdSense.

For FY 2005, Google grossed $6.14bn and reported a net income of $1.47bn.

"We invest with a long-term view of the business. We are going to make some really big bets," Google CEO Eric Schmidt said. And the company can afford to: Google finished the fiscal year with $8bn in the bank. Google has become the internet company onto which the popular media's futurist fantasies are projected, a service performed by Microsoft a decade ago. But even we were perplexed by this one. ®

Security for virtualized datacentres

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Why Oracle CEO Larry Ellison had to go ... Except he hasn't
Silicon Valley's veteran seadog in piratical Putin impression
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.