27 February 2008

Google's share price sinks to nine-month low

Internet giant Google's stock price fell yesterday (February 26th) to a nine-month low following an industry report which suggested that fewer internet users are clicking on its advertisements.

The report, which was produced by comScore, indicated that clicks on the search engine provider's sponsored links decreased by 7.5 per cent in January compared to December.

Google's stock price dipped below $448 per share during yesterday's trading but recovered to $462.5 by 23:00 GMT, representing a fall of five per cent for the day.

According to Bloomberg, Google's share prices have decreased by 37 per cent since November 6th last year, meaning a drop in combined wealth for its co-founders Larry Page and Sergey Brin of around $17 billion.

Ben Schachter, an analyst with global financial services firm UBS, stated that Google's prospects may be dampened by a slump in the market and a general economic slowdown. He has cut his 2008 profit forecast for the company by 1.8 per cent to $20 a share.

He stated: "While we remain fans of Google over the long-term, we expect near-term expectations will be difficult to meet.

"Though we hesitate to read too much into comScore data in general and one month's release in particular, we are incrementally more cautious on our revenue growth estimates for Google sites."

Meanwhile, Rob Enderle, an analyst with technology advisory and consultancy organisation Enderle Group, stated that the disappointing results reported by Google are "not indicative of endemic problems", the AFP reports.

He added: "We need to see a pattern before we say there is a problem at Google."

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