Google results, filed by mistake, miss; shares dive

“Google Inc inadvertently released its draft quarterly results hours ahead of schedule, missing expectations on both revenue and earnings and wiping 9 percent off the market value of the Internet search and advertising leader,” Alexei Oreskovic and Edwin Chan report for Reuters. “Google said its financial printers, RR Donnelley, filed its draft results statement without authorization. The company said it was working now to finalize the statement. The surprise announcement, which had been expected after the market close, pushed its shares down 9 percent to $687.30 before trading was halted by Nasdaq… Shares of RR Donnelley, the U.S. printing services company, slid as much as 5 percent. They were down 2.2 percent at $10.61 in afternoon trade.”

Oreskovic and Chan report, “Google, which has been struggling to turn around loss-making cellphone maker Motorola Mobility that it bought for $12.5 billion, reported a 20 percent dive in net income to $2.18 billion. Excluding certain items, it earned $9.03 a share, vastly underperforming the $10.65 analysts had expected, on average… Google reported net revenue – excluding traffic acquisition costs – of $11.3 billion for the third quarter, below Wall Street’s expectations for about $11.9 billion. For the fourth consecutive quarter, the company reported a decline in average cost-per-click, a critical metric that denotes the price advertisers pay Google.”

“Average CPC declined 15 percent from a year ago and 3 percent from the second quarter of this year. Analysts say that Google, like many of its peers in the Internet industry, has been struggling to adapt to the rapid consumer uptake in mobile devices. Advertisers pay far less for adds on smartphones and tablets than for similar ads on desktop computers,” Oreskovic and Chan report. “‘The core business seems to have slowed down pretty significantly, which is shocking,’ said B. Riley analyst Sameet Sinha. ‘The only conclusion l can look at is, search is happening more and more outside of Google, meaning people are searching more through apps than through Google search.'”

Read more in the full article here.

MacDailyNews Take: RR Donnelley, enjoy that big fat lawsuit you’re about to get slapped with, ya hear?

What you are seeing is a paradigm shift. Until mobile ad rates catch up and unless Google can figure out a way to monopolize it they way they did with the desktop (hint, they can’t, thanks to Apple), they are a declining one-trick pony. If they don’t come up with some new, meaningful revenue stream, they are in for a world of hurt. Android isn’t it – they make little or no money from it and the users are cheapskates, so the ad rates Google can command for Android suck. The desirable users – the ones with money to spend and the will to spend it – are on iOS and seeing Apple iAds.

Google’s going to rue the day they got greedy by deciding to try to work against Apple instead of with them.MacDailyNews Take, March 09, 2010

43 Comments

  1. Web based search has peaked. Stripping Google one flayed skin at a time:
    – Siri: Wolfram Alpha voice activated search
    – iOS maps: Yelp! Points of interest
    – Apps
    – Mobile: withdrawal of iOS as major search engine contributor
    – iAds: ads for mobile computing platform
    – Amazon: direct product search
    – Baidu: no presence in China

  2. GOOG may be evil but if you pick up some here at $685 (even better with options) you’ll make some nice money. Stock is supposed to trade before the end of the day so you do have some time yet. Love is love. Investing is investing. Never ever, ever confuse the two. Never fall in love with stock. Not even AAPL. And if you hate GOOG? Then what better way to get revenge than to make money at it’s expense? C’mon, it’s investing. Always keep your emotions out of it. This is nearly a $70 drop today, can you say buying opportunity? Just like Apple has dropped over $70 in three weeks, that’s a buying opportunity also. Although AAPL may have some more downside before earnings next week? And after earnings it’s going to be difficult to guess because of the iPad mini release. But there’s money to be made here gentlemen, the door won’t be open forever.

      1. I already have that covered. I have some very nice 2013 AAPL calls thank you. Remember there’s nothing wrong with a little diversification. Don’t put all your eggs in one basket. For all those buy and hold investors out there : the last three weeks have been very painful. Had they taken profit when Apple reached 705, look where they could be re-entering! Selling is okay. It doesn’t make you a daytrader. It just makes you a wise investor. Holding onto a stock forever isn’t some badge of courage. It’s nothing to brag about. You can stay in Apple but you just need to pull out once in a while when you’re way ahead. It’s just common sense.

    1. One of my dreams was to have SJ standing in front of the Googleheadquarters giving the one finger salute like the one in front of the IBM headquarters. Alas, I will never see that dream come true.

      A good substitute would be seeing Scott Forstall do it in SJ’s name.

  3. Now… Why do you think Apple is releasing the iPad Mini…, with mobile search becoming the juggernaut it is, Apple knows that by taking the 7 inch tablet market, as it did with the full size, the pain will only increase as they stranglehold Googles lifeblood, search.

    The next step will be adios to Google search from OS X … And then as Google slowly bleeds out ….I love Tim Cook… Still water runs deep… And cold.

    1. What I am waiting for, is for Apple to release a Maps.app for OSX.

      But they will only do so after the iOS version has made enough progress in the extent and accuracy of its map data.
      The quality of Apple’s homebrew iOS Maps will quickly surpass Google’s, because the underlying representations are already better.

  4. anecdotally, I have moved many of my clients from google adwords mostly to yelp and some to Facebook, because Google adwords got too expensive and results were going down the tubes. Google’s core CPC business is going down and the Android unit does not produce enough revenue to make up for this loss – I am expecting another huge GOOG drop if that analysis is reported.

    1. I did the same thing when they were busted stealing our personal information from our phones. I won’t use Google at work either. I take my privacy VERY seriously, which is ANOTHER reason I buy Apple devices. I feel a layer a protection.

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