Feeds

Google shares plummet past $300, reach three year low

Wall Street ignorant of Mountain View money machine

5 things you didn’t know about cloud backup

Google's share price has dipped below $300 for the first time in three years, after some Wall Street guessmen decided the ad broker's revenues are on the wane.

After a high of $747.24 on November seventh of last year, the company's stock closed at $291 in Nasdaq trading yesterday, and today, it dropped another two per cent to $284.99.

Yesterday's fall was sparked by doom-and-gloom "research notes" from three Wall Street types claiming to know the future. "Search marketers almost universally expect Q4 to be the weakest they have ever experienced,” said Citigroup's Mark Mahaney, who chopped his fourth-quarter earnings-per-share guesswork to $5.03 from $5.17.

Meanwhile, Collins Stewart’s Sandeep Aggarwal dropped his all-of-2008 EPS estimates to $19.50 from $19.60, and Stanford Group’s Clayton Moran now puts his as low as $19.38.

All three analysts also cut their Google predictions for 2009. And their reports came hot on the heels of similarly dismal predictions from Barclays and Goldman Sachs.

Clearly, these analysts don't realize how easily Google can crank the dial on its top secret money machine. In the third quarter, as rivals like Yahoo! buckled under the crumbling economy, Sergey Brin and crew saw profits leap 31 per cent after tweaking their AdWords platform to allow more ads onto search results pages.

More ad coverage means more clicks, and more clicks mean more revenue.

Before the third quarter, Google had spent several months decreasing ad coverage in an effort to improve what it calls ad "quality." But now that the economic landscape has changed, the Oompah Loompahs have turned the dial the other way.

Yes, Google is still dependent on advertisers forking cash into their AdWords accounts. But advertisers are far more likely to abandon display ads before pay-per-click search ads - which make it much easier to at least imagine a return - and Google has monopolized the search market.

If any online ad biz can weather The Meltdown, it's Google - simply because it's the last place advertisers would turn away from. Or as Google chief executive Eric Schmidt put it: "We believe that [Google's Q3 results] reflect the fact as marketing budgets are squeezed, targeted ads are becoming more valuable to advertisers... And as consumer budgets are squeezed, people use the web for comparison shopping to hunt for bargains online and in stores."

When Google reports a healthy fourth quarter, we won't be surprised at all. ®

5 things you didn’t know about cloud backup

More from The Register

next story
BBC: We're going to slip CODING into kids' TV
Pureed-carrot-in-ice cream C++ surprise
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Twitter: La la la, we have not heard of any NUDE JLaw, Upton SELFIES
If there are any on our site it is not our fault as we are not a PUBLISHER
Facebook, Google and Instagram 'worse than drugs' says Miley Cyrus
Italian boffins agree with popette's theory that haters are the real wrecking balls
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
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?