Open

Coming up

Don't miss

Replay


LATEST SHOWS

FASHION

Paris, Haute Couture Fall/Winter 2014-2015.

Read more

REPORTERS

Exclusive: an unlikely victim of the 'War on Terror'

Read more

AFRICA NEWS

2014-07-11 21:47 AFRICA NEWS

Read more

MEDIAWATCH

Finally, a good use for new app "Yo"

Read more

THE WORLD THIS WEEK

The World This Week - 11 July 2014 (part 2)

Read more

THE WORLD THIS WEEK

The World This Week - 11 July 2014

Read more

#THE 51%

Sweden: A Feminist's Paradise?

Read more

FRANCE IN FOCUS

Politics: parties under pressure

Read more

FOCUS

In Burma, the rise of radical Buddhism

Read more

  • Israeli platoon attacks Hamas base as tanks line up along Gaza border

    Read more

  • Rival Libyan militias exchange heavy fire at Tripoli airport

    Read more

  • Holland beat hosts Brazil 3-0 to finish third in World Cup

    Read more

  • Germany vs Argentina - history and genius clash in World Cup final

    Read more

  • Iraqi parliament resumes session on key appointments

    Read more

  • French court lifts mayor’s ban of Muslim hijab on beach

    Read more

  • Afghan presidential candidates agree to full vote audit, Kerry says

    Read more

  • France’s Kadri wins eighth stage at Tour de France

    Read more

  • Last of the Ramones, Tommy Ramone, dies aged 62

    Read more

  • Video: Outrage in wake of deadly Casablanca buildings collapse

    Read more

  • Iraqi forces ‘executed prisoners in reprisal’ for ISIS killings

    Read more

  • Ukraine promises retaliation after rebel assault

    Read more

  • Putin revives old Cuban flame and eyes Latin American minerals

    Read more

  • Amazon snubs French free delivery ban with one-cent charge

    Read more

  • Cleveland's NBA fans hail 'return of king' LeBron James

    Read more

Google stock price sinks due to Web ad-slump fears

©

Latest update : 2008-02-27

Google's stock price sank Tuesday after a report hinted the boom of online advertising might end. According to industry-tracker comScore, the number of click ads dipped seven percent from December.

Google's stock price sank Tuesday in the wake of a report hinting that boom times may be over for the Internet darling's money-making online advertising.
  
The number of click ads in January was essentially the same as it was in the same month a year earlier, and dipped seven percent from December, a month known for major holiday shopping, according to industry-tracker comScore.
  
Google's stock price dipped below 448 dollars per share on Tuesday but was 462.55 dollars in after-hours trading at 23h00 GMT, representing a five percent drop for the day.
  
Investors evidently fear the comScore figures signal an end to Google's years of exponential revenue growth.
  
"The difficulty is that Google is being measured by high growth year over year that has been holding the stock price up," said analyst Rob Enderle of Enderle Group in Silicon Valley.
  
"Any reduction in growth rate is going to have a catastrophic effect. When the market is already nervous about going into a recession the combination will cause the stock to trade down."
  
Google was founded in 1998 by Stanford University students Serge Brin and Larry Page. Its stock price rocketed after its initial public offering price of 85 dollars per share in August of 2004.
  
Consistently strong earnings and its crown as king of Internet search drove the price to nearly 750 dollars per share in October of last year.
  
Google's quarterly profits have topped a billion dollars, with most of the money coming from Internet ads that advertisers only pay for if clicked on to activate online links.
  
However, Google has been confronted with concerns about "click fraud," bogus clicking on Internet ads by competitors or crooks.
  
Google has explained while discussing earnings in recent quarters that it is taking steps to reduce click fraud, and to improve relevance and reduce numbers of ads displayed on search pages.
  
Financial analysts at Bear Stearns and Citi Group issued reports expressing confidence in Google's future but saying they will be watching the company closely.
  
"One month, even one quarter, is not indicative of endemic problems," Enderle told AFP.
  
"There is a reasonable chance that Google may have mitigated the downside of this. We need to see a pattern before we say there is a problem at Google."
  
The drop in price of Google stock represents a buying opportunity, according to a written advisory issued by Bear Stearns.
  
"The shares are attractive at these trading levels, in our view," Bear Stearns wrote. "Google remains the dominant company within the online advertising industry, with healthy growth prospects."
  
Google's share of the Internet search market continues to grow incrementally, according to comScore.
  
Citi Group rates Google shares "buy/high risk" for reasons including its dominance in the "robust" online advertising market and its "underappreciated" potential to expand its services beyond Internet search.
  

Date created : 2008-02-27

Comments

COMMENT(S)