November 10, 2008

Google tanks on low expectations

by Brian Turner

Analysts are losing their optimism for Google, with the GOOG share price now at it’s lowest for three years.

Google has seen its share price tank by 52% over this year – significantly higher than the 41% loss the S&P index has seen over the same period.

While tech stocks have been taking a hit in general, especially during October’s crash, the market for online advertising is seen as under threat – and thus threatens Google’s revenues, which are expected to be relatively flat on last year.

The trouble is, online advertising is the most powerful form of advertising around – not least because ROI statements can be built in at so many different levels.

Personally speaking, while a withdrawal of advertising spend from print media and TV makes sense for downsizing budgets, I would expect to see more of this spend continue to move online, not least because of measurable ROI which can be used to justify marketing costs.

In the meantime, it remains to be seen whether analyst gloom is founded or not – but I think any company taking advantage of the internet as a main marketing channel with competent spend management and ROI statements, has the opportunity to push themselves into a leading position.

Story link: Google tanks on low expectations

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