Google hit by falling advertising prices
Friday 20 January 2012
Google's moneymaking machine misfired badly in the fourth quarter as its advertising prices fell during the holiday marketing season.
The results announced yesterday fell way below the lofty expectations of stock market analysts, causiong Google's shares to plunge more than 9% after the numbers were released.
Google earned $2.7bn (£1.8bn) or $8.22 (£5.35) per share, during the October to December - a 6% increase from $2.5bn (£1.6bn), or $7.81 (£5.08) per share, on the same time in 2010.
If not for certain items, Google says it would have earned $9.50 (£6.18) per share. Analysts surveyed by FactSet had expected $10.51 (£6.84) per share.
Revenue climbed 25% from the previous year to nearly $10.6bn (£6.9bn).
After subtracting ad commissions, Google's revenue totalled $8.1bn (£5.3bn). That was about $300m (£195m) below the average analyst forecast.
The disappointing performance stemmed from a surprising downturn in the prices that the internet search leader collects for each click. The average price declined 8% from the same time in 2010.
The erosion reversed what had been happening earlier in the year. The year-on-year increases in Google's price per ad click had ranged from 5% to 12% increase in the first three quarters of 2010.
The fourth quarter marked the first time Google's revenue surpassed $10bn (£6.5bn) for any three-month period in the company's 13-year history.
Reaching that milestone was not enough to impress investors. Google shares shed $58.56 (£38.10) to $581.01 (£378.03) in yesterday's extended trading.
New UK station Russia Today gives a very bizarre view of Britain
By performing as African Americans or Indians, white people get to play act a kind of 'imaginary liberation', writes Michael Mark Cohen
New essay by JK Rowling went live on Pottermore site this morning
Top Gear presenter is no stranger to foot-in-mouth controversy
- 1 'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
- 3 Topshop at centre of row over body image as 'shocking' skinny mannequin photo goes viral
- 4 If you think Russell Brand’s new book is confused, you should read what his critics have to say about it
- 5 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
Halloween 2014: From the Screaming Man of Pluckley to the 'White Lady' of the Tower of London - Britain's 20 most haunted places
Russian politician says Apple CEO Tim Cook should be 'banned' from country after coming out as gay
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Maureen Lipman says 'she can't vote Labour while Ed Miliband is leader'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
iJobs Money & Business
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...
£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...