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Google Report Loses Trading Thrill

On October 20, 2005, Google reported earnings that beat analysts expectations handily, causing the shares to surge as much as 14 percent in after hours trading. Don’t expect the same kind of thrill ride tonight.

Three out of the last four quarters, Google has reported earnings that beat expectations, but investors yawned and sold anyway, according to data compiled from Birinyi Associates.

Now that the company is firmly established as the world’s largest search engine, investors are no longer impressed by an earnings beat, instead they are focusing on what the next revenue generator will be for what some call a glorified advertising company.

The stock dropped 5 percent after its first quarter earnings report this April when it was revealed by the company that Chief Executive Eric Schmidt will no longer participate in quarterly earnings calls. Investors, frustrated by the company getting the boot out of China earlier in the year, fretted about possible infighting at the firm.

“Investors are getting frustrated these days by Schmidt, Sergey and Larry,” said Jon Najarian, co-founder of OptionsMonster.com and TradeMonster.com.

Google’s shares are down more than 20 percent this year heading into the report after the bell, making it one of the worst performers in the technology sector.

Najarian also blames the disappearance of the retail investor as a reason for losing interest in the Google story, as well as reason for the reduced volatility following the earning. Investors pulled money out of the stock market last year despite its monster rebound. Also, by some estimates, nearly 3/4ths of the activity each trading day can be traced back to computers these days.

“They’ve got to split the stock,” said Najarian, who is also a ‘Fast Money’ trader. “No public investor is buying it anymore.”

It was a different world when Google went public in 2004. One of the reasons for its early success was participation by average investors who used the search engine everyday and loved the product.

For the best market insight, catch 'Fast Money' each night at 5pm ET, and the ‘Halftime Report’ each afternoon at 12:30 ET on CNBC.

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Trader disclosure: On July 15, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour owns (AAPL), (BP), (INTC), (MSFT); Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Terranova owns (GOOG), (AMZN), (MON), (APC), (GMCR), (MYL), (MRVL), (BAC), (ADI), (ADBE), (AKAM), (HES), (CVS), (AXP), (EMC), (ABT); Jon Najarian own (APC) short calls; Jon Najarian own (COP) short calls; Jon Najarian own (CVX) short calls; Jon Najarian own (GS) put spreads ; Kelly owns (BP) puts; Kelly is short (GS)

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