Google Inc. (GOOG): 2nd Quarter Earnings Up By 19%

July 17th, 2009 - 6:34 pm ICT by GD  

5Google Inc. (GOOG) surprised the markets with its better than expected 2nd quarter results, which saw earnings growth of 19%. But strangely enough Wall Street did not react positively as the stock saw a fall of 2% to $430 within hours of trading. Experts are saying that the investor community might be disappointed as they might have expected even better numbers from the online search and advertisement giant.

The 2nd quarter results declared by Google also showed that the company’s revenue growth has slowed down. This signifies tough economic environment for its advertisement business which forms a significant share of its revenue. Before the announcement of these results, Google shares had gained almost 12% in the past 10 days or so as investors were expecting a stellar financial performance from the internet giant. In fact on a year-to-date basis the stock was on a 44% high.

According to experts and analysts one big area of concern for investors and the company alike is that there has been significant fall in the ‘revenue-per-click’ model of Google’s business. But experts were somewhat satisfied at the fact that the company has been able to cut costs over the last few quarters as was evident from its earnings growth.

Google being one of the biggest pure-play internet businesses, analysts are now focusing their gaze on other internet companies as well, as they eagerly wait to decipher trends in context of the future of online advertising and search business. Google’s Net Income has been seen at $1.48 billion in comparison to $1.25 billion last year. Eric Schmidt, the company’s Chief Executive however said that he believes that the company is “very well-positioned for the future.”

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