Google Earnings Tank the Stock
Which is just what I–the Amazing Kreskin–predicted would happen in a post on Yahoo on Monday.
“At least Yahoo shares, which have remained lackluster, are not likely to be impacted, as the disappointment is already baked in, ” I wrote. “In Google’s case, most are waiting to see if it blows away estimates–which would not necessarily give a bump to its high-flying stock–or just meets them, which could clip the wings of its shares.”
Snip, snip then–after the search giant fell short of expectations due to burgeoning costs of making all that money. Even though revenue was up 58% (which was actually a lower rate of revenue growth from previous quarters), Google’s unexpected and aggressive spending sent its shares down in after-hours trading, dropping almost $35 to close at $514.
And more good news for the do-no-wrong company, which can allegedly do wrong: a subcommittee of Congress has opened a preliminary antitrust investigation linked to its $3.1 billion offer to purchase of the online advertising company DoubleClick. Given the dominance in the online ad market gained by Google with the deal, this move comes as little surprise.
Here’s another obvious prediction: CEO Eric Schmidt has his hands full in the coming year. And if you want to know a lot more about how he is looking at that responsibility, here’s Walt’s interview with him in its entirety at D5 in late May:
Please see this disclosure related to me and Google.