Feeds

Google shares plummet past $300, reach three year low

Wall Street ignorant of Mountain View money machine

Beginner's guide to SSL certificates

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. ®

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
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
OECD lashes out at tax avoiding globocorps' location-flipping antics
You hear that, Amazon, Google, Microsoft et al?
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.