Peter Chun

Wow.

Google misses earnings, stock plummets, people “freak” out - before some thoughts, here are some facts:

• Total paid clicks in the fourth quarter rose 30% compared to the same period in 2006, but slower than the 45-52% growth seen during the first three quarter of 2007
• Most disappointing probably was the number of aggregate paid clicks which increased just 9% during the quarter
• For the first time since its initial public offering three years ago, Google’s quarterly profit failed to climbed more than 25%
• Overall, Google reported fourth quarter net income of $1.21 billion, or $3.79 per diluted share, up nicely from $1.03 billion, or $3.29 per diluted share, in the same quarter last year but, the earnings per share number excluding items came in at $4.43, below the consensus analyst estimate of $4.47. Revenue also fell short by $60 million

Now for some Thoughts

• Google search market share is the largest it has ever been (through December of 2007)
• The online advertising market continues to grow with healthy projections into 2012 (with search leading the charge)
• Google adjusted clickable areas through the paid search (top listings) from the “shaded area” to the actual “advertisement” to reduce what they call “invalid” clicks (different from fraud clicks, as they cast a wider net of false positives to catch invalid activity before it needs to be accounted for)
• Google’s investments and entry into new markets/products/services will need to come together over the next few years - the dependency on the advertising business unit will continue to become an issue
• Google needs to diversify the revenue mix and need to manage the street’s/investors expectations - they’re growing…don’t forget that

This entry was posted on Tuesday, February 5th, 2008 at 7:48 pm and is filed under Google, affiliate marketing, internet, online advertising, web 2.0. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.