Dispatches from the Digital Revolution

Google’s fourth quarter earnings miss the mark


Google’s fourth quarter 2011 earnings, released last Thursday, January 19, fell short of analyst expectations in a rare miss. Though Google posted earnings that were positive—the company reported $10.58 billion in revenues, or a 25% increase over fourth quarter 2010—they were far less than expected, and its stock price plummeted 9% in after-hours trading on Thursday evening into Friday morning.

The Los Angeles Times explains that “Google’s earnings of $9.50 per share were below Wall Street’s target of $10.49 a share.” Claire Cain Miller of the New York Times points out that the disappointing earnings could be indicative of “analysts’ longer-term concerns that 2012 could be a difficult year for Google as it navigates antitrust investigations, intellectual property litigation over Android, competition from Facebook and the acquisition of Motorola Mobility, the struggling handset maker.”

“Google’s disappointing results were particularly surprising because it rarely misses analysts’ expectations and because the fourth quarter is usually its strongest, fueled by retail ads for online holiday shopping,” Miller adds.

Apparently mum’s the word in the Google camp, however. In its press release, Google CEO Larry Page doesn’t address the disappointment felt on Wall Street, and is quoted as saying:

Google had a really strong quarter ending a great year. Full year revenue was up 29%, and our quarterly revenue blew past the $10 billion mark for the first time…I am super excited about the growth of Android, Gmail, and Google+, which now has 90 million users globally—well over double what I announced just three months ago. By building a meaningful relationship with our users through Google+ we will create amazing experiences across our services. I’m very excited about what we can do in 2012—there are tremendous opportunities to help users and grow our business.

Adding insult to injury after the disappointing news, Apple announced last Thursday that it would be making a strong play for the growing e-textbook and self-publishing markets. Surprisingly, Google stock has not yet rebounded after Friday morning’s low of about $585 per share; as of Monday morning, the stock still hovered around the $586 mark.

It’s news like this that makes me wonder: when Larry has a bad day at the office, does he too go home, pop in an oldie-but-goodie like My Best Friend’s Wedding, eat a pint of Ben & Jerry’s Half Baked, and have a good cry?


This entry was posted on January 24, 2012 by in Business, News and tagged , .

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