As investors wait for Google to announce first quarter earnings later this week, the question is how bad will it be? J.P. Morgan analyst Imran Khan put out a note this morning predicting that U.S. revenues will actually decline 2 percent from last year and will be down 13 percent from last quarter. (His prior estimate was for 5 percent growth). Overall, he expects net revenues to decline 4 percent instead of 2 percent and Khan also revised his pro forma EPS estimates down 5.5 percent from $5.04 to $4.76.
What’s got him spooked? Through February, comScore is showing declines in U.S. search activity (measured in query volume) and Khan’s own checks with search-engine marketers leads him to believe that commercial-oriented searches took a hit during the quarter. That would be significant since so far search has remained the healthiest segment of the online advertising industry. While search advertising has experienced a dramatic slowdown in growth, it has yet to see any actual declines. Will this be Google’s first down quarter in terms of revenues?
It is certainly acting that way—cutting temporary workers and even a few hundred full time staff, and killing projects left and right. Khan thinks all of these cuts will result in $450 million in savings this year alone:
● We believe Google has taken a very conservative stance to employee count, perks, and business investments. Cuts include reducing usage of ~6,000 contract workers and ~300 full-time employees (our est’s), cutting some free food cafes, the hours they run, and the people to whom the perk is extended, and shutting down or discontinuing further development of some businesses. We estimate that these cost cuts will reduce spend by ~$450M in F’09.
Finally, Khan believes that about 20 percent of Google advertisers will cut back their spending as a result of tighter credit markets and the general economic downturn. Meanwhile, the stock has been on a tear the past month, rising from $290 on March 9 to today’s closing price of $378. Will a bad quarter end the ride, or will Google somehow pull it off despite the challenges?
Google stock will surge because it is immune to the media generated doom and gloom recession. It’s earnings will crush estimates as it always seem to do. Target 700 soon. Long live google. http://iamned.com/blog/
What google should do next is buyout facebook & twitter
immune? I’m not sure if you were joking or are simply mildly retarded…If they were immune the stock would be at 700-1000 now! But instead they have been getting crushed as they have clearly not been immune
um..hum the Nasdaq is down 40% form its peak. Everything is getting sold off. not once in any conference call has google hinted that it has been hurt by the recession. The management acknowledge its existence, but they keep beating the estimates.
technotopia – “beating estimates” doesn’t say a lot on its own. I could make a company that is blowing through billions yet still “beating estimates.”
Beating estimates simply means doing better than what people are expecting, and the current macro conditions have already been factored into their estimates. Stock prices do factor in estimates, which it already has. There’s a reason it isn’t $700.
Run, Billy, Run1 Send Lassie for help! Ahh…I’m not sure I’ll make it, just warn the others.
Now, go on! Go!
“um..hum the Nasdaq is down 40% form its peak. Everything is getting sold off.”
I thought you said Google were immune from the rest of the markets?
Google’s overall performance would have been SOOO much better, even with the current ww slump, if only their bets placed in markets such as China is staff by someone else than their current country head, Kaifu Lee. While Google sank no less than US$300 million in China during the past 4 years, its market share dropped from being #1 (34%), to the current distant second, with a paltry share of less than 20%.
Twitter won’t make it and if you leave that KID there much longer it will go for $45.37 with a nickle deposit.
Twitter will make it, because I’m @ferodynamics
The human race won’t die because I’m @adam.
Well, I’m still not saying hello to @mikeyy. Let him run out of beer.
-*-And please, junior, when you build a front page make sure you leave somecredits and orderinginfo so I’d know you are a human and would have domeinsight into your business.
I’m not solving a puzzle todealwith you, that is sad.
Especially if you sell a better wireless kb that doesn’t have a PS jr like setup and horrible space bar?
Its not immune, will get impacted in short term, but over long term the current crisis will work in favor of Google as SEM will prevail over other forms of advertising.
Ad sense revenue will take a beating and google will need to evolve the model further
Wow! Even Google are hit back by the recession! Did not think Tech would be stuck so badly, surprising still how other sites are still doing well but Google, mind blowing..
Google will do OK. But, more advertisers are moving to CPA.
CPA has been an option since 1994.
If Google advertising revenue *declines*…then people should be shorting Yahoo stock, seriously.
Or Time Warner…or News Corp…as search advertising = the only one so far that hasn’t seen a dip…which means if it *does*…I’d be putting my heads between my knees & kissing myself goodbye if I was one of their competitors…or look for the angry shareholder mob to want to decorate some pikes & pitchforks with heads.
Don’t tank a toilet paper company or you very well might…
Google could pull a surprise this quarter. Wasn’t it last year that comScore said that Google would have a bad first quarter and pulled ahead in a big way? Perhaps it was HitWise. Either way, you can’t take their data as fact, Google will report the facts in their earnings.
Agree. Google will surge in AH big time..end the year above $600/share. Can’t fail buying google stock and holding it long term.
I hope you are like 13 and not a reasonably thinking adult…”can’t fail” is about the dumbest thing an investor could possibly think. period.
Read the rest and try not to hurl.
If you can’t recall exactly who it was then perhaps you should go back and find them beforemaking such an important conclusion?
google will knock it out of the park…
Let me guess.
You’re shorting GOOG?
Don’t shoot GOOG…it only takes once and you’re babbling about it with flashbacks the rest of your life!
12 stepping that. Since 2002 all they’ve been good for is finding the same porn sites reliably,,,
A number of web site owners are seeing the same dramatically lower Google Adsense revenue share numbers we are. Google admitted to me that this is across the board. They are suffering just like almost all organizations. And they will rebound just like almost all well run organizations.
yup..it’s temporary. You can’t stop web 2.0 and e commerce.
You (technotopia): “Google … immune to the media generated doom and gloom recession. ”
Steven: “They are suffering just like almost all organizations.” You, in response: “yup…”
I love the contradiction.
I don’t see anybody else hedging so well. Does that make his advice a ‘market exclusive’?
As a former member of Google Groups, I never saw the ‘organization’ spoken of here. I saw a lot of whining, angry Groups and AdSense users in the peer-run Groups help forums. A disaster. If you’ve never actually USED Google this way then I can’t expect you to understand.
Still, you had better.
I dunno let’s see. The economy also makes a lot of Adwords cheaper (it’s of course done that with display ads). If they are cheaper, the ROI may actually increase … which means more (of perhaps a smaller) marketing budget into Adwords …
Please find this guy a job.
Google will be okay, I think they will surprise the market.
Especially YOU, padre.
i think search is falling off b/c laid off workers where basically goofing off. real users of the internet are fewer than most people think b/c most people only use it to kill time and do excel spread sheets.
this is why they get laid off, nothing really or them to do anyway.
You just tried a Bunker knot, clarify please.
nothing to cliarify except numbrs are falling b/c real users of te internet, compared to those that just goof off from work, are lower than most people think…
for example, twitter is mostly used by 35-50 year olds, mostly pr/marketing/bloggers just trying to pimp each other.
google is basically search, and so, less people at work, less people searching; less money clicking.
silicon valley’s big start ups usually rely on these “do-nothing” workers to use their web 2.0 stuff and to spread the word;
with bidness, get’n downs to bidness; dat shits stops.
after the .com bubble bust, things really tightened up; to strict in the office, now, ain’t games allowed.
so, if you search google, you hunting for what you need rather than clicking on ads an check’n things out.
Dat shit DON’T stop though because your idea of Google is 17 years old. Search doesn’t sustain Google and that’s why they have been buying all this ancillary stuff for over 15 years. Search matured a long time ago and the service PORTAL model is necessary to keep Google’s cores interactive and synergistic. Customer service is supposed to be a CORE and without it Googleor any other business suffers.-
Now I show my supposed age as have Google into 1992. There wasn’t any internet service where I live in 1992 ;-p
5 million screaming Yahoo! OMG bloggers are just floored. You heartbreaker, TSK.
Google will do well when they release earnings. The analyst dropping expectations only helps them. It will just make it easier for Google to beat the now lowered expectations.
http://www.thew...bwar.com/google
Sounds like Enron to me. Don’t like your chances? Get a new opinion.
KIDS.
They were so amazed by Enron, WorldCom, AT&T is a brand name…
What’s actually retarded is that after eighty years you are talking with the same naivete as your grandparents about ‘dynastic’ stocks. There have been several cycles of catastrophe since 1985 (most of you probably aren’t older than 1976 by my estimation) and yet you seem unable to wean from the bottle. This isn’t about an economic reality, it’s another thrill like sex or drugs.
All things must pass.
Last earnings, I mentioned that Google would beat projected earnings (and was right) considering they flipped the switch to monetize any possible products that weren’t already. Products like YouTube overlay ads (which has proven to be a failure and YouTube now projected to lose $471M this year), allowing alcohol companies to advertise, parked domain monetization, etc. all took place last quarter. This time around, Google didn’t have such a platter to choose from to help boost revenues, so they got out the chopping block. Things are not going to be great for Google this quarter. That $378 stock price is not going to be there for long.
http://budurl.com/2dg2
Wow, the first sensible comment in the thread.
Very true : writing is on the wall for Google – they’ve tried to monetize everything in the last 12 months and are running out of gimmicks and diversions to make them look like they’re bucking the trend. This quarter will see them follow the trend of downturn.
They’ve been skimming off Adsense constantly too. It’s hardly worth being an Adsense publisher these days.
So the one-trick-pony company didn’t learn any new tricks and finally they will start to really crumble. Share price @ $150 by end of the year.
BTW I was born in 1966 so don’t paint too many wrinkles on me (none present and my hair is OEM too).
Based on what I have seen in my AdSense account, I am betting they are actually going to have a decent quarter. But, I also subscribe to the belief that Google pulls their magical lever and changes their percentages of rev. share to hit their earnings. Since AdSense has been paying out more money recently, it’s my bet that they are doing well.
Or they are propping up AdSense to hold a better position and keep the ad revenues up while they take dramatic losses as well as the expected hits from acquisitions and startups.
I made it through some community college classes and a lot of life by 1992 and I’m not giving you a scholarship for economics schooling if you can’t look at more that AdSense, honestly.
So you are giving me a lesson on how well you have done adjusting to the internet as an old man, thanks! Out of curiosity, how much revenue, in terms of percentage of total revenue, do you think Google makes from AdSense?
Ask Sergey. I’m in the group that would burn your house down if you closed my toilet paper factory, remember? Someday WW III will be fought over toilet paper against the hideous King of Burger.
43 is only old because 23 year olds were gathered from our DNA.
Wall street loves to try and create pullbacks so the can buy more shares at better prices. They are usually a contrary indicator talking things up so they can sell and talking them down so they can buy more of a good thing.
Why is Google up so much lately?
Don’t you think a few people know how the numbers look by now? If the indicators were weak the stock would be under selling pressure already.
Google is very smart and very well run. They will have issues but they have a lot more room to grow.
Fun watching the chaos, what planet are you from?
DEV/NULL. That’ll be one Rolo bar.
I’m long GOOG — yet I agree w/tinycomb for this quarter: ain’t gonna be pretty (on the gross revenue front — they’ve been going great on curbing costs ever since they hired Pichette as their CFO, so *net* numbers may not be that bad). I’ve got a substantial slice of my savings in GOOG, but that’s because it’s gonna be 5-8 years before I retire, and *by then* I trust they’ll have become a solid dividend-paying money spinner. For the Q-to-Q trading game, they’ll be wobbling for a bit. But if you’re looking to start a long position there, I’d start after earnings, next week, not before, i.e. now. (Or, sells puts at 350: if I’m right you get into the stock decently, if I’m wrong you still pocket the puts-selling premium!-)
Or you lose your hat having sold the puts…you clearly know very little about equity markets by the very fact you have a substantial portion of your nest egg in 1 stock a mere 5-8 years before retirement. Every one reading this should see you as a shining example of what not to do.
And then, laughably, you offer selling puts as a sound solution? As if that is a hedge of some sort here?
@todd anderson, chill out, man! You clearly need to learn more about option-selling, e.g. start at http://www.inve...lingoptions.asp , read it, ponder it, follow the links, etc. Then re-read my advice: I’m saying that, instead of putting in a limit buy order at 350, you might as well sell put options at 350; that will start you off with 4.70 in premium, let you in at 350 just like a limit buy order on the stock would (iff, in both cases, the price does decline below 350) — if the price does NOT decline below 350 you just keep the premium if you’ve sold the option, while you would have foregone that consolation prize if you had put in a limit buy order instead. Not a “hedge”, just a little vigorish wrt the limit-buy-order choice — and *definitely* no way to “lose your hat having sold the puts” as you surmise! It’s just the equivalent of the “selling covered calls” strategy investopedia mentions “if an investor wishes to sell out of his or her position in a stock when the price rises above a certain level” (superior to a limit sell order under such circumstances), except that this one applies “if you’re looking to start a long position”, as I mention.
And btw “my nest egg” does not equate “my savings”: IRAs &c (typicaly in low-load index funds such as Vanguard’s), insurance policies, large equity in my home, etc, are part of the “nest egg” but not of “savings” I actively manage. You may be an index-fund fanatic, if you consider that being in anything else than such funds is “a shining example of what not to do” — but as for me, I’ve got most all the exposure I want to such indices via the above-mentioned instruments, and I see nothing wrong with investing substantial slices of the actively managed savings in a few single stocks; in fact, for anybody who’s not doing this as a full time job, I’d be surprised to see any slice that is not substantial, say at least 5% — how many stocks can you carefully follow in your spare time, after all…? Surely no more than 10 to 20. (If you’re against any interest in single stocks, then what else besides trolling and insulting people are you doing in a thread about a given company’s quarterly-earning prospects?-)
I don’t see your logic either.
*SLOT MACHINE*
There will be competition to Google AdSense. ADSDAQ is already doing a *decent* job (they can’t guarantee they’ll sell your ads, but they’ll try and you tell them the price). OpenX is launching an exchange, although, admittedly, it’s too early to tell if it’d make anybody any money, there will be others.
I think they days of seeing nothing but those hideous AdSense ads all over the freaking Internet are coming to an end.
How does it relate to the stock price? I don’t know. I think Google is capable of gravity-defying stunts for a few quarters. But so was Bernie Madoff. Ultimately, they won’t be able to just go on as a monopoly. And eventually, their stock price will reflect the non-monopoly status.
Oh, I think they will beat last quarters number and last years number. They have easily squeezed enough out of the publishers cut (like mine) to make $5.25/share earnings. They report earnings Thursday April 16, after the close. -Harvey
Google will never see the 100% or 90% or 80% or 70% or even 60% or 50% increases year over year that I witnessed from Sept 2004 until Dec 2007.
Google needs to declare a dividend to attract investors as it is now just another big cap stock that relies on one source of revenue.
Google is now the worlds largest ad agency. Too bad, because it could have been the worlds largest tech company instead.
Why are there so many google haters? Why do so many want to see google fail? http://iamned.com/blog/
They haven’t done much to earn the fanboi drooling in a long time, that’s why.
If they had done so You Tube would actually make money hand over foot instead of fighting X/Y/Z every other day. I’ve already said i tried to be a peer helper in Google Groups and saw the anger of users with real, honest needs, not just for a group they ran but most other Google features due to the fact they couldn’t find support.
AdSense, Picasa, trolls…nobody could SEARCH for the info !!It didn’t WORK!!
Isn’t SEARCH what they founded the company on?
Their biggest mistake was buying the Deja Usenet portal and never taking the time to improve it or make it safer for the Google AND Usenet users before they introduced user groups. Being locked out of one’s own account, hijacked accounts, malicious spam, not being able to import your member lists without major hassles (security too hard to figure) and of course nobody seemed to have a clue where to turn or were angry when they did and were told they couldn’t be helped there.
They all fell into the groups spiderweb. They also bounced like pinballs between Yahoo and Google not knowing where to go to get what they thought they needed. I was incredulous and dismayed to find group owners claiming member lists of 10,000 or even 192,000??? in a system I could clearly see was meant to be a practice run before renting a server and running forums software (some ofthem HAD to befull of it but I could not tell).
You folks that only see a stock ticker and haven’t actually gotten your nails dirty are disingenuous and the same suckers waiting for the fall EVERY TIME. Yahoo may not seem like much to you but it is a WORKING company and one that adapts well when it sets out to.
You are the folks that piss me off with the buy Yahoo! It’s destiny… crap. Spineless orgy drones or something. Yeesh.
Microcomputer user since the late seventies.
Its a temporary.. they will shoot up like anything..!
Even a heroin addict? whoa
Seems the ‘market’ disagrees. Strong increase today ($10 ~ 3%) which was against the broader market trend for the day.
Lots of volume to go with it. That would indicate good news for tomorrow’s earnings report.
Seems like a lot of people were just waiting for an excuse to get in.
All the Google slamming here seems like too much emotional connection and not enough detachment.
One key piece of advice for investors is not to fall in love with a stock. The opposite seems to be happening here. Objectivity is the key. Yes, Google is imperfect. But they do a ton of good stuff as far as I can tell. They are smart, and well managed.
Reminds me of Microsoft in the early 90’s. I was a young investor when MSFT originally went public. I bought them. Then I got nervous when they didn’t jump up. I sold. Then it took me over 5 years to buy back in. All the while MSFT looked grossly overvalued. Once I took the plunge, I hung on and MSFT grew steadily and significantly for 7 or 8 more years.
GOOG seems the same to me. I didn’t like it at $700 this time last year. But I like it here. I’m not saying it’s a screaming buy, but it’s not way out of whack.
It was a screaming buy at $280 back in November. I’ve been in and out ever since. I say in and out because it’s just plain crazy to buy and hold. It’s been crazy since 1999. The traders, hedge funds, and automated trading see to that. They push things up too far and take them down too far. It’s crazy to sit still for that kind of whiplash. See it for what it is. Trade the swings. Hedge with options. Be happy with the gains. Cut your losses.
I say sell at 20% gains and get out with a 10% stop. Use options to take advantage of the extra volatility.
BTW, complaining and being negative and sarcastic is a disease. It’s very easy to criticize. It’s hard to resist that impulse.
Yeah, Google Groups suck. Yeah, Google doesn’t listen much on their own groups. So they aren’t perfect.
They do a ton of good smart stuff. They are way better than MSFT ever was and MSFT grew steadily for many years despite their suckage.
Zen investing. Detachment. Ommmm
The problem here is do I sell because it’s up nicely (my 20% rule). Or do I take the chance that it will pop after the report? I say take it now.
Of course, I got out of NFLX at 39 and it touched 50 only about 2 weeks later! Oh well. You can be sure the traders will push it too high.
I never trust someone who is pushing. Regardless of whether it’s pro or con. That means they either have an agenda, or they are not objective enough.
You don’t have to trust me for any reason.
I don’t buy stocks either. Gambling is a disease. telling me where yours were at X isn’t important.
Skepticism and pessimism are healthy traits in the forward minded. The Tea Party thing was a huge waste of time although it was better than shooting folks.
You already have companies scrambling to give back their “bailout” money and crawl back under the bench in their dugouts hoping the next inning is coming quickly. The volcano god is not appeased. Google has been shuttering and firing for ONE REASON ONLY.
Google doesn’t do this as a rule, nor do any other businesses usually. Most companies try to operate everywhere and in any field they can until it bleeds. It’s not often that anybody other than consumer brands owners (a bunch of them in the past 2 years) will flip a product of division. Still, a soft drink brand such as Crush is rarely liquidated.
Of course these are wetrd, ill times when Hummer or Saturn aren’t it, it’s GM and Chrysler.
I’m not sure I like Obama’s whoopings, much as I dig him otherwise. Polly’s Ticks are biting hard so I’m done with that.
You aren’t getting a prize in the Cracker Jack box Wednesday, only Corn and Nuts.
PS Peanuts are LEGUMES, not NUTS.
If googles going that bed why stock still going up?
http://www.goog...inance?q=google
Because stocks are based on speculation, not an complete and solid figure of how the company is working.
People decide what they want to pay based on it’s value to them and then they bet the other will increase the price until they reach a price they want and sell to capture a profit margin.
It’s really distressing how little some of you know about stocks and usually your ilk get hurt hard and fast when bad things happen.
To: Fun watching the chaos
Sounds like rationalization and denial to me.
Admit it, nothing will change your mind. That’s not objectivity.
Yes, the market is subjective. So you are saying that your view is the only correct and objective one here?
It’s ok to have an opinion, we all do. But to say that yours is the ‘correct’ one is like saying your review of the Mona Lisa is the only one that counts. Maybe I don’t like the Mona Lisa, but what difference does that make?
It’s more useful to admit that everything is opinion.
If the stock went down would you still say that the stock market is BS anyway? I don’t think so. You would be going on about how you were right and how the market confirmed it.
I didn’t say your opinion of Google is wrong. I said the indicators were that it would go up and it did. That’s useful. Saying they suck and therefore should be sold is not using all the data available. It’s the opposite of being in love with a stock (never a good idea). Best if you leave the emotions at the door.
On Thursday at 3:50 I sold the 390 calls that were to expire on Friday for $13. That gave an effective cap on my gain at $403 and gave me a cushion to $388 – 13 = $375 in case it did fall. All for a single day. The stock hovered over $390 and I let it get called for an effective sale price of $403. That’s objectivity. Not love. Not hate. Just seeing which way the wind was really blowing.
So much for your prediction of no prize in the earnings box. Great thing is I didn’t even have to hear the earnings. I got what I wanted by watching carefully, seeing all the ‘options’, and taking advantage of the situation.
Now for my next ‘prediction’. It will drift downward over the next 2 to 4 weeks. And I will pick it up again when I think it’s at a decent value (under $370).
Google isn’t laying off because it’s in dire straits. They are laying off because it’s prudent in this economic environment.
I’m not god but I am not in Nine Inch deNial either. I have learned to stick with my impressions for they have some merit to them many times.
If I am wrong,I’m not going to die from any but the last one, am I?
Objective? i Iive on a fixed budget and have leftover money without stocks. I have two projectors and radio sets dating back to 1937, am getting a good function generator, speakers and building a new antenna tower then saving for a car with the $250 President Obama authorized.
Investing in stocks without balancing my portfolion, other things in my basket would be onething in any instrucions to my friends as to when to have me checked for dementia as both of as all my grandparents went through the Great Depression without them anyhow and taught me more about money and life. I lost my grandfathers years ago but my grandmothers are both 90 now and I’m going to lose them sooner or later.
You never learn enough before they go. You don’t think to listen much until it’s too late.