Welcome to WebmasterWorld Guest from 54.163.94.5

Forum Moderators: goodroi

Message Too Old, No Replies

Google 4Q Profit Misses Targets

Google 4Q Profit Misses Targets

     
9:48 pm on Jan 31, 2008 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:Mar 16, 2004
posts:854
votes: 0

10:14 pm on Jan 31, 2008 (gmt 0)

Moderator from US 

WebmasterWorld Administrator lifeinasia is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

joined:Dec 10, 2005
posts:5634
votes: 51


Net income up "only" 17% from last year? That's it- the RECESSION is officially here! Everyone start a run on the banks and start leaping out the windows of your tall office buildings!

I guess it was a slow news day. But then again, it makes sense that biz.YAHOO.com would choose to highlight a story like this about Google. :)

10:28 pm on Jan 31, 2008 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:Mar 16, 2004
posts:854
votes: 0


I just grabbed this link, its on thousands of financial sites homepages right now.

[reuters.com...]
[reuters.com...]

has it highlighted on the homepage as well and im sure Reuters isnt anti Google;)

Interesting numbers if you ask me, still look solid but slowing for sure.

4:00 am on Feb 1, 2008 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:Mar 16, 2004
posts:854
votes: 0


Some more news is coming out on this, seems social networking sites are not doing well for advertising.

[techland.blogs.fortune.cnn.com...]

"Google (GOOG) blamed a slowdown in its fourth-quarter growth on its difficulty selling ads on social networking sites. The company delivers online ads for about 20 social networking sites, including MySpace (NWS). “I don’t think we have the killer best way to advertise social networking,” said Sergey Brin during a conference call with analysts Thursday. “Some of the things we were working on in Q4 didn’t pan out. There were some disappointments there.”"

7:13 am on Feb 1, 2008 (gmt 0)

Senior Member

joined:Dec 29, 2003
posts:5428
votes: 0


LifeinAsia,
Google's stock has been in la-la land based on much higher expectations. While 17% is very good, Goog had a PE of 50+ and a valuation of some $200 Billion (at one point).

"Normal" companies have a PE of 18-20 and Warren Buffet seems to like 12. Now as a tech company is a bit different but growth matters--a lot. See AAPL as well. MSFT has a PE of 18 by the way. If MSFT was judged by google standards, they'd be worth about $700 Billion

5:05 am on Feb 1, 2008 (gmt 0)

Junior Member

10+ Year Member

joined:Oct 12, 2004
posts: 191
votes: 0



System: The following message was spliced on to this thread from: http://www.webmasterworld.com/goog/3563525.htm [webmasterworld.com] by engine - 10:40 am on Feb. 1, 2008 (utc 0)


[iht.com ]
1:52 pm on Feb 1, 2008 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:Aug 23, 2004
posts:894
votes: 9


Good. Only wish they missed by more.
2:11 pm on Feb 1, 2008 (gmt 0)

Senior Member

WebmasterWorld Senior Member billys is a WebmasterWorld Top Contributor of All Time 10+ Year Member

joined:June 1, 2004
posts:3181
votes: 0


With a PE in a more reasonable range of 20, GOOG could drop another $250 per share. If I had to guess, today's market could drive their price to a PE of around 30 (and this is still a challenge for any company to hold at that level). So we could see GOOG drop another $100 per share in the short term. If I had to guess, things will settle down below $400 per share.

Still a great company, but it looks like the party might be over.

[edited by: BillyS at 2:11 pm (utc) on Feb. 1, 2008]

2:27 pm on Feb 1, 2008 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:Aug 23, 2004
posts:894
votes: 9


I fail to see what makes them a "great" company. More like a one-trick pony (search monetized with adWords/adsense) tons of cash from wall Street and a smattering of good ideas.

They're OK, but I find them to be heavy-handed, short on customer support and lacking in a clear direction other than wanting to monopolize the web and advertising.

They seem to have taken the paths of least resistance in all aspects of their business and have limited business acumen.

In my estimation, they should have announced a 3-for-1 stock split with this earnings release to make the shares more reasonably priced and available to more investors while rewarding those who have held the stock. The timing for it was perfect and they've never done a stock split. They missed an opportunity and will now pay the price. Support is in the $400 area, though a drop below that would not be surprising.

2:35 pm on Feb 1, 2008 (gmt 0)

Senior Member

joined:Dec 29, 2003
posts:5428
votes: 0


agree BillyS. They might pull the 30 PE off since they can always come up with an "iPod" but it's tricky. Many new markets (radio, cell, socials etc) are not working out. At least not as planned or to justify $150 billion market cap. Let's think about it: entire nations are worth less :).

Personallly, I'd rather own 35% of PG than 100% of google if I had to keep them for 10 years.

3:28 pm on Feb 1, 2008 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:July 25, 2005
posts:991
votes: 1


the whole business, 98% of revenue based on that tiny javascript..

google, don't put all your eggs in one basket! ;)

edit:
ok, actually only maybe 30% of their revenue is based on that tiny javascript. the other 68% is delivered server side.

[edited by: moTi at 3:55 pm (utc) on Feb. 1, 2008]

5:27 pm on Feb 1, 2008 (gmt 0)

Senior Member

joined:Oct 27, 2001
posts:10210
votes: 0


The fact that Microsoft is offering $44.6 billion for Yahoo suggests that the Internet advertising basket is nowhere near full.
8:38 pm on Feb 1, 2008 (gmt 0)

Senior Member

WebmasterWorld Senior Member 5+ Year Member

joined:May 9, 2007
posts:1362
votes: 0


They're OK, but I find them to be heavy-handed, short on customer support and lacking in a clear direction other than wanting to monopolize the web and advertising.

Absolutely, fearlessrick, absolutely.

I really could not hide a big big grin when I read Microsoft's takeover offer for Yahoo!, perfectly timed with Google (the greatest one-trick pony on earth) missing expectations.

And seeing their stock fall "to earth" (as some journos say already) is also a relief. Maybe they finally come to their senses and offer better support for customers (and partners!)?

I just hope that YHOO/MSFT get their act together and give a healthy kick in the &%$#! :-)

Today is a good day.

12:11 pm on Feb 2, 2008 (gmt 0)

Full Member

10+ Year Member

joined:Mar 17, 2004
posts:301
votes: 0


They seem to have taken the paths of least resistance in all aspects of their business

fearlessrick nailed it. I've been scratching my head over their valuation for years, as a company with only one real product that is ancient by Internet standards. They've been cranking up prices quarter after quarter (under the guise of Quality Score, revised interpretation of Broad Match, and Smart Pricing) to maintain the growth. Price increases are like caffeine -- it can give you a nice boost, but if it's your only source of energy you'll eventually come crashing down.

Google developed a fantastic product over a half decade ago, and really hasn't done much since aside from pat itself on the back while milking it. Its product development efforts look more like hobbyist noodling than a focused approach to creating new profit centers.

It'll be interesting to see how this plays out.

8:55 pm on Feb 2, 2008 (gmt 0)

Senior Member

joined:Oct 27, 2001
posts:10210
votes: 0


They've been cranking up prices quarter after quarter (under the guise of Quality Score, revised interpretation of Broad Match, and Smart Pricing) to maintain the growth. Price increases are like caffeine -- it can give you a nice boost, but if it's your only source of energy you'll eventually come crashing down.

Smart Pricing isn't a "cranking up" of prices (it's the opposite), and the Quality Score is more about filtering out the chaff than raising the price of wheat. In any case, arguing that "price increases" are Google's "only source of energy" is pretty farfetched. Wall Street's unhappiness isn't the result of revenues "crashing down"; it's due to unrealistic growth expectations (and, quite possibly, nervousness about the effects of a recession on advertising revenue).

1:26 am on Feb 3, 2008 (gmt 0)

Senior Member

joined:Dec 29, 2003
posts:5428
votes: 0


Reason #1: less accidental clicks not that the box is no longer active. Thoughts?
3:17 am on Feb 3, 2008 (gmt 0)

Senior Member

joined:Oct 27, 2001
posts:10210
votes: 0


That certainly could be a factor.

BTW, I was reading a NEW YORK TIMES article about the proposed Microsoft/Yahoo acquisition that mentioned an interesting advertising rule of thumb: the "21 and 7" rule, meaning that 21% of the average user's media time is spent online these days, while only 7% of advertising is spent online. That suggests a lot of room for growth (not just for Google, but for online media in general).

2:33 pm on Feb 3, 2008 (gmt 0)

Senior Member

joined:Dec 29, 2003
posts:5428
votes: 0


I was reading at this forum who stuffed the page with new ads. Their problem: revenue is down 50% since the clickable are change. Now it may not be exactly 50% and other factors might play too, but apparently it has had an impact--at least on them.
7:08 pm on Feb 9, 2008 (gmt 0)

New User

5+ Year Member

joined:Feb 9, 2008
posts: 1
votes: 0


“I don’t think we have the killer best way to advertise social networking,” said Sergey Brin

That was the part I found interesting.

6:50 pm on Feb 12, 2008 (gmt 0)

Full Member

10+ Year Member

joined:Jan 15, 2004
posts:274
votes: 0


Why is Google so surprised that they can't effectively monetize social networks? Am I the only one that realizes most of the traffic on social networks is from kids? Why would anyone think they could monetize that without being able to target specific demographics? Only just NOW Google is beta testing demographic targeting for the content network.

As soon as they have proper demographic targeting in place they will see revenue from social networks rise considerably.