Google Disappointing Quarterly Market Results
Thursday, January 31st, 2008Eric Auchard reported on www.reuters.com today that Google Inc. has just disappointing quarterly results on rising capital spending and costs for acquiring advertising customers, unnerving investors who sent its shares down 6.5 percent.
Revenue rose 51 percent to $4.827 billion, just shy of the $4.83 billion, on average, analysts had forecast. A rising level of payments to affiliated sites that deliver Google ads, called traffic acquisition costs, also surprised some.
“This quarter was softer-than-expected across the board,” Cantor Fitzgerald analyst Derek Brown said. “Revenue from Google Web sites was a little bit lower and traffic acquisition costs were slightly higher than we had expected.”
The disappointment was especially pronounced given the Web search leader’s record of beating expectations, analysts said. It was only the third time in 14 quarters as a public company that Google failed to top Wall Street profit forecasts.
But Google executives underscored their belief that there were no signs that a weakening U.S. economy so far was hurting its own results and that they expect advertisers to maintain spending with Google even if they slash overall ad budgets.
“We have not yet seen any negative impact from the rumors of future recessions,” Chief Executive Eric Schmidt told investors on a conference call, challenging investor psychology that has clobbered global stock markets in the past month.
