Google Soars Most Since IPO; Profit Trumps Estimates (Update4)By Ari Levy
“April 18 (Bloomberg) — Google Inc. posted the biggest gain since its initial public offering after profit trounced analysts’ estimates, spurred by overseas growth and a bigger-than-predicted jump in the number of users clicking on text advertisements.
Google, owner of the most popular Internet search engine, advanced $92.68, or 21 percent, to $542.22 at 2 p.m. New York time in Nasdaq Stock Market trading. The shares debuted in August 2004.
International sales soared 55 percent, outpacing total growth and allaying concerns that Google is suffering from a U.S. economic slump. Excluding some costs, profit topped the average Wall Street estimate by 32 cents a share and beat predictions of all but one of the 26 analysts surveyed by Bloomberg”.
Later in the same article:
“The U.K. accounted for 15 percent of Google’s revenue in the period, up from 14 percent in the fourth quarter. That country’s economy expanded 2.8 percent in the fourth quarter, compared with 0.6 percent growth in the U.S.
Shares of other Internet companies also rose. Amazon.com Inc., the largest online retailer, jumped $6.70, or 9.1 percent, to $80.74. Internet auctioneer EBay Inc. rose 80 cents, or 2.6 percent, to $31.81.
Overstock.com Inc., the biggest online seller of excess retail inventory, climbed $4.03, or 29 percent, to $18.03 after its quarterly loss was narrower than estimated.”
This interesting fact was also noted later in the same article:
“ComScore, which issues monthly reports on ad-click numbers, said the growth had slowed to 1.8 percent in the first quarter. In yesterday’s report, Google cited an increase of 20 percent.
The discrepancy may stem from the way ComScore measures the data. The Reston, Virginia-based company only tracks domestic ad clicks and doesn’t include results from Google’s AdSense service, which places ads on Web sites such as online newspapers and blogs. Google gets almost all of its revenue from four-line text ads that mainly run alongside its search results.
`Pretty Happy’
“We’ve been pretty happy with our paid-click growth,” Google co-founder Sergey Brin said in an interview after the report. “Across the board, we’re performing well.”
ComScore spokesman Andrew Lipsman declined to comment. Shares of the data provider fell as much as 3.9 percent today.
Google captured 63 percent of Web queries worldwide in February, up from 62 percent in December, according to ComScore. International sales accounted for 51 percent of revenue last quarter, up from 48 percent in the fourth quarter.
“I don’t think that number is going to go down,” Chief Executive Officer Eric Schmidt said on a conference call. He credited some of that overseas expansion to market share growth and sales gains in China.
Technology companies such as Intel Corp. and International Business Machines Corp. also reported results that topped analysts’ estimates this week, following a quarter when the Nasdaq Composite Index tumbled 14 percent. Even so, the recent results don’t make the whole industry attractive, Weinstein said.
“There are a lot of opportunities on a company-by-company basis,” he said. “Certain companies can take more control over their growth and how they drive it.”
Yahoo Deal
Trying to catch up with Google, Microsoft Corp. has bid $44.6 billion for Yahoo! Inc., a transaction that would combine the second- and third-biggest U.S. search engines. While Yahoo rejected the bid in February, analysts and shareholders say the board may eventually agree to the purchase.
Google’s performance in the first quarter increases the pressure on Microsoft Chief Executive Officer Steve Ballmer, said David Garrity, director of research at Dinosaur Securities Inc. in New York.
The earnings put “Ballmer and Microsoft in a little bit of a corner, which probably people at Google don’t feel so bad about,” Garrity said today in a Bloomberg Television interview. “This does set things up very well.” ”
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Just an interesting thought to consider. The internet is possibly a stronger indicator of what is really going on with the economy. By its very nature, the networking aspects of the internet allow for much more feedback from the rank and file.
I remember watching a Western movie where a robber baron cut off the water supply to the other farmers to force them to sell cheap and move away. Those who refused to sell were strong armed and some were even killed. Even though there was a crisis, it was an artificially created one, because there was plenty of water for everyone.
During this time when talk of Recession is running rampant, all of us would do well to focus in on some key areas.
- Stay away from “Get Rich Quick Schemes”.
- Remember the value of diligence where work is concerned.
- Pay down personal debt.
- Remember the long term benefit of owning your own home but stay with the 2 ½ times your household gross income rule.
- Understand the priority of purpose. When you spend your time doing what you feel called to do things will open up to you. Even if you do it on a volunteer basis at first – do it all you can and watch how your life begins to fall into place.
Google is not the only one who can soar during this time. Observe those who are thriving and extract the key principles. Warren Buffet said we were in a recession but he seems to be doing ok.
