It was hardly a shock. Google net revenue missed analyst expectations by US$60 million (A$67 million), or just 2 per cent. And this was on revenue that totaled $4.83 billion – a 51 per cent increase over the year-ago quarter.
Rather than taking the shine off Google, however, the market seemed more concerned that the result amounted to more evidence of a troubled US economy.
Google chief Eric Schmidt said the company was happy with the result. But some in the market say the disappointment merely points to concerns that the company will not be able to sell as much online advertising as expected as the US heads toward an economic slowdown.
“We're very pleased with our performance this quarter,” Mr Schmidt said.
“It reflects strong momentum in our core business, growing receptivity to our new business initiatives, and improved discipline in managing our operating expenses.”
Reports say some investors are also concerned about Google’s participation in the Federal Communications Commission’s spectrum auction, which will ultimately cost the winners at least US$4.6 billion. Google is bidding on bandwidth with the view of establishing a national wireless broadband network.
Google’s share price rose US$16 dollars to more than US$564 in steady trading on Thursday before the announcement, but took a pounding – losing US$45, or about 8 per cent – after the fourth quarter results were announced.
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