“Search monetization gains have largely been realized,” Google CFO George Reyes told a Merrill Lynch audience this morning — and the stock dropped $50 or 14 percent. By now, shares have stabilized, aided by calm-down notes from at least one analyst, and it’s only down by nearly 5 percent. I’m not going to spend the day chasing GOOG but it’s worth noting that the reaction by people who don’t understand the kind of company they invested in as a hot stock set off a drop across the internet sector — and a 1-percent dip for NASDAQ. Reyes also delivered as clear a message as you’re going to get about some the pressure driving Google into other areas. To quote from Marketwatch, “… most of what’s left is organic growth. [This] means you have to grow traffic and monetization. Clearly, our growth rates are slowing and you see that every quarter. We’ll have to find other ways to monetize the business.”
Webcast (archived)
Update: Google issued a statementafter the market closed: “We would like to clarify and provide further information on these statements. As we have stated before, monetization improvements will continue to be a key factor in driving future revenue growth. We still see significant opportunities to improve monetization and intend to continue to focus our efforts in this area. Moreover, as we have stated in our SEC filings, our revenue growth rate has generally declined over time and we expect that it will continue to do so as a result of the difficulty of maintaining growth rates on a percentage basis as our revenues increase to higher levels.” Maybe someone else can figure out where the clarifying starts.
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