More Videos
- RIM's BlackBerry Storm Worth The Hype?
- Dell: Earnings Show Cost Cutting Measures Working
- Tech Check Gift And Gadget Guide, Vol. 1
- Xbox Vs. PlayStation With Netflix Caught In The Middle
- Yahoo Needs More Than Yang's Leaving To Recover
- Yang Out And About Time: So Now What For Yahoo?
- Facebook and Google's Dot Com Holiday Blues
- Apple Investors' Hope for the Holidays
- Intel's "Dramatic" Warning—Was It Really A Surprise?
- Apple iPhone Gets The Business From Citrix
- Lightning Round OT: PPL, Arcelor Mittal, Cardinal Health
- Mad Money Lightning Round: CF Industries, Gentex, SunTrust and More
- Geithner News Sends Shorts Scrambling
- Berkshire Hathaway Bounces Back By 16% For Best Day In Decades
- Quick Market Stats: Week Ending 11/21
- Turkey Day Will Gobble a Bigger Bite From Your Wallet
- "Twilight" From Summit Takes A Bite Out of Major Studios
- "Bug" Flying And Car Industry Woes: Your Emails
- Is There a Bull Market for Airlines in Second Life?
- US Inflation Bonds Hit by Deflation, May Recover
- Pros Say: Market Will Drop 5-10% — Ford Will Boom
- Bonds Drop on Profit-Taking, Geithner Move
- Jack Welch on Detroit: Let Them Go Bankrupt
- Bank Shareholders Face 'the Unthinkable': El-Erian
- Heinz Profit Rises, Thanks to Hedging
- AnnTaylor Swings to Loss, Pulls Outlook
- Where the Layoffs Are—Is Your Firm on the List?
- Citigroup's Pandit: We Will Not Sell Smith Barney
Text Size 
 |
Click here for more earnings info |
There is a fair amount of pessimism around these shares right now, with many analysts I'm talking to expecting a meet or miss quarter, rather than a good chance the company will beat expectations. That's a strange place for this company to be in, and it is clearly reflected in the company's stock. Google [GOOG
Loading...
()
] shares have been a mess recently, falling through $100 milestone after $100 milestone on a fairly regular basis since those lofty $700 highs back in November.
What's the problem? Lots of conflicting data, for one. We're hearing routinely from market researchers including comScore, that paid clicks have fallen off a cliff, and the indication is that the company is experiencing a precipitous slowdown in business. That data has been controversial, to say the least, with comScore releasing some data, and then essentially retracting a week later. Still, the firm reports March clicks grew at a paltry 2.7 percent, with first quarter total growth of only 2 percent.
But Google, which uses another metric to report its paid clicks, along with other experts, say the lack of clicks is actually because of a new software algorithm the company is using to weed out non-performing clicks, and making the clicks the company does get more valuable for its customers. If it's the former, that's probably largely built into the stock. If it's the latter, investors could see a sizeable pop to the upside when the company reports earnings after the bell later today.
related content |
"You've got a lot of noise to work through. You've got a series of channel checks, that's what we've done. If the growth rate really fell off a cliff...that should show up in marketers, and their businesses, and advertisers and their businesses, and in certain pockets it has, looks like financial services and mortgages. But in other pockets, like travel services and retail, it hasn't. So it's hard to explain the disconnect. There clearly is one," Mark Mahaney at Citigroup tells me.
Google and the experts following the company do seem to agree there is some kind of slowdown afoot; what the market has to digest is how severe it is, and what exactly is causing it. Remember that last quarter on the earnings call, CEO Eric Schmidt was clear in saying that the company was seeing no signs of an economic slowdown, no signs of recession. For a company that doesn't offer any meaningful guidance, analysts will be listening extremely closely to the comments on the conference call today to see if that position has changed any. If Google sees signs of a macro-economic slowdown, that could be bad news not just for Google, but for Yahoo [YHOO
Loading...
()
] , Amazon [AMZN
Loading...
()
] and others. Citigroup's tells me "there's a very clear bogey laid out there. We're going to see whether they'll repeat those exact words this quarter, or start fading away from them."
Analysts this time around are expecting Google to report $4.52 a share and $3.61 billion in revenue, excluding traffic acquisition costs. No guidance from the company so nothing to look forward to, and no real other metrics to focus on. Which will lead many on the Street to focus on color and commentary during the conference call.
More posts |
These shares are off better than 30 percent this quarter, so it's clear traders aren't expecting much. For the longer term investor, however, with Google closing the DoubleClick deal on the quarter, increasing its market share in search, Yahoo and Microsoft [MSFT
Loading...
()
]distracted by the hostile takeover and no real competitor offering any challenge to Google, slowdown or not, Google looks very attractive at these levels. If you're patient, and can stomach the short term vagaries.
Questions? Comments?
Del.icio.us
Digg It
Data is a real-time snapshot *Data is delayed at least 15 minutes