Open

Coming up

Don't miss

Replay


LATEST SHOWS

DEBATE

Europe's Plan for Putin - Will Russian Leader Bend After New Sanctions? (part 2)

Read more

DEBATE

Europe's Plan for Putin - Will Russian Leader Bend After New Sanctions?

Read more

FOCUS

Pakistan's Ahmadis living in fear of extremist attacks

Read more

WEB NEWS

Web users show solidarity with Iraqi Christians

Read more

THE INTERVIEW

Gilles Kepel, Islamic and Arab world specialist

Read more

BUSINESS DAILY

Argentina braced for another debt default

Read more

DEBATE

Too Late for Sanctions? Pressure Mounts on Russia over Ukraine (part 2)

Read more

DEBATE

Too Late for Sanctions? Pressure Mounts on Russia over Ukraine

Read more

MEDIAWATCH

'What would you do?'

Read more

  • US and EU slap Russia with fresh sanctions over Ukraine

    Read more

  • Scores killed as Israel ramps up Gaza bombardment

    Read more

  • Graphic: Ebola spreads across West Africa

    Read more

  • In pictures: ن - a sign of support for Iraq’s persecuted Christians

    Read more

  • Calls mount to ban France’s ‘violent’ Jewish Defence League

    Read more

  • Venezuela: Hugo Chavez’s ‘little bird’ strikes again

    Read more

  • France extradites suspected Jewish Museum shooter to Belgium

    Read more

  • Video: How tourism is helping Rwanda’s gorillas, ex-poachers

    Read more

  • Rare Sri Lankan leopard cubs born in French zoo

    Read more

  • France evacuates its nationals from Libya

    Read more

  • US says Russia violated arms treaty by testing cruise missile

    Read more

  • Argentina in last-ditch effort to avert default

    Read more

  • Karzai’s cousin killed in Afghan suicide attack

    Read more

  • Libya oil tanker fire blazes out of control

    Read more

  • In pictures: From Gaza to Mosul, bittersweet end of Ramadan for Muslims

    Read more

  • Moroccan police arrest French al Qaeda recruiter

    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

COMMENT(S)