Turns Out That Google Isn't Infallible

from the miss! dept

After quarters upon quarters of nearly flawless performance, Google has finally hit a speed bump. The company failed to meet Wall Street earnings expectations, owing to a combination of rapid hiring and unimpressive advertising sales. By the standards of any other company, this quarter would've been very strong, but since it's Google, it's held to a much higher standard. Still, the company is publicly putting on a brave face, claiming that things look bright going forward. Google's freewheeling hiring and spending shouldn't come as too much of a surprise to anyone, seeing as the company continues to aggressively recruit, all the while releasing a slew of new offerings. If the company's problems are as simple hiring too much, then the continued growth of its business should eventually make up for the extra overhead. But if the company's problems are deeper -- and some of the advertising woes suggest they could be -- then its management will be find itself in uncharted territories, as it tries to right the ship amidst a slowdown.
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Filed Under: search
Companies: google

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  1. identicon
    Wolfger, 20 Jul 2007 @ 4:45am

    Re: Ummmm....

    No. The *stock* has lost value, not the company. There is a difference. The value of the stock is the publicly perceived value of the company. That's why you'll often hear market analysts refer to one stock or another as "overvalued" or "undervalued", meaning that the stock value does not accurately reflect company value.

    Failure to meet Wall Streets expectations is bad for stock value, but it really doesn't affect the company's value at all. Google is just as good or bad an investment as it was a month ago. If anything, it's actually better, since the stock valuation just took a hit.

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