Home IT companies Google’s search advertising revenue fell for the first time

Google’s search advertising revenue fell for the first time

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Google Corp. today published Q2 2008 financial results The immediate 10% drop in Google stock makes you take a closer look at the numbers : what’s wrong with them?
Google's search advertising revenue fell for the first time
At first glance, all is well: revenue of $5.37 billion (three times less than Microsoft’s, but not bad either), up 39% over the same period last year and up 3% over the previous quarter. Quarterly earnings were up 35% over last year to $1.25 billion.
However, all of these achievements have sharply diverged from investor expectations According to prior projections, Google should have performed much better. Investors had hoped that the Internet business would not be affected by the general stagnation in the U.S. economy, and that Google, through its overseas divisions and the transition of all advertising from offline to online, would be able to grow at the same pace. But that hasn’t happened. Google’s revenue growth has slowed, too, and quite noticeably so. Revenues from search advertising and AdSense have even decreased by 1% compared to Q1 2008. This is the first such case in the history of the company. If you look only at the revenue of google.com, they fell by 4%. This also happened for the first time in history.
Of course, pressure on Google’s stock price is also put by the fact that Yahoo and Microsoft are closer than ever to a merger agreement, and in fact, Google recently signed a 10-year contract with Yahoo to supply contextual advertising to their portal. If Yahoo goes to Microsoft, it will be a sensitive blow. But with the diversification of business at Google is still tight: neither YouTube, nor DoubleClick while do not pay back multibillion-dollar investments. Search brings the company 94% of its income.

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