Google is mortal: shares fall on disappointing Q4 results

GOOGLE investors were left "shocked and disappointed" by the internet giant's quarterly results yesterday, prompting a 10 per cent drop in shares.
 
Sales between October and December amounted to $8.13 billion, around $280 million short of estimates predicted by analysts.
 
The results were particularly surprising, says the New York Times, because Google rarely misses analysts' expectations and because the fourth quarter is usually its strongest, fuelled by retail adverts for online Christmas shopping.
 
One of the main causes for the revenue slowdown appears to be Google's expansion into mobile advertising. This helped to increase the total number of clicks on Google adverts by 34 per cent last year. However, adverts viewed on mobiles are considered less valuable than those on computer screens and the average charge per ad subsequently fell by eight per cent.
 
Operating expenses, spent on areas such as Google's new Android software for smartphones and its social networking service Plus, rose by 34 per cent in the last three months, exceeding the 25 per cent increase in company revenue.
 
Growth was also hampered by the weakened euro, which eroded the value of overseas earnings.
 
Google's CEO Larry Page insisted he was very happy with the results, adding that "2012 promises to be a fantastic year".
 
But analysts said the results show the internet search leader is not invincible. "Quarter Four is Google's time to shine, and it was just OK results, so Google looks a bit mortal," Colin Gillis, analyst at BGC Partners LP tells Bloomberg.
 
Is this the latest warning sign that technology stocks have difficult times ahead, asks the Wall Street Journal. Shares in technology companies have been one of the main leaders in 2012 but if Google's shares fall as sharply today as they did last night, shares could end up worth less than when Page became CEO last April. ·