'You Can't Bet Against Google': Social Network CEO
Follow The Daily Ticker on Facebook!
Shares of Google tumbled as much as 9% Thursday afternoon after the tech giant's third-quarter earnings report showed that its core advertising business was slowing. Google's earnings shocker was accidentally released hours before the scheduled earnings announcement and Nasdaq halted trading of Google shares for almost three hours after the stock lost nearly $22 billion in market value.
Larry Page, CEO of Google, told investors that financial printer RR Donnelley "hit send on the release just a little early."
Regardless of the premature release, Google's disappointing earnings raised questions about the company's future ability to reap profits from search and mobile devices. In a conference call with analysts, Page insisted that the company was in a good position to capitalize on its mobile business. He said Google generated $8 billion a year from mobile ads even though the revenue on mobile devices was significantly less than what the company earned from desktop ads. Google's cost per click dropped 15% from the same quarter last year, the fourth-straight quarter of declines.
As more and more consumers use mobile devices to check email, watch videos and read the news, it has become more challenging for companies like Google, Facebook and Microsoft to monopolize on the mobile trend. According to digital advertising research firm eMarketer, Google controls 55% of the market in mobile ad revenue and 95% for mobile search ads.
Howard Lindzon, CEO of investing social network StockTwits.com and a Google shareholder, says one shaky quarter has not changed his bullish view on the company.
"I am going to buy some more for my kids," he says in an interview with The Daily Ticker. "Google is kicking butt. You can't bet against Google. It's a great company and it's growing."
Lindzon says he will continue to add to his Google position if the stock price drops further. (In recent trading, Google shares were down 2.4% to $678.28.)
The anxiety over Google's mobile business should be directed toward Microsoft and Nokia (NOK), he says.
Larry Page is "managing the company as if the stock price does not matter. And that worked for Jeff Bezos a long time ago too," Lindzon says. "These guys could less about their stock price."
More From The Daily Ticker