It was quite interesting to see that Google’s share price plunged by more than 10% shortly after they had released their latest trading figures yesterday.
Let’s consider the facts:
- Full year revenues up by 29%
- Quarterly revenues up 27%
- UK income up to just over $1bn last quarter
- Operating profits up 6%
We’re not sure about you but we’d take these numbers for our business. If that’s failure then bring it on!
Analysts were apparently not impressed with the Earning Per Share and the lack of growth in Europe and so pegged the shares back by 10% in after hours trading.
We’re not sure but there seems to be some sort of disconnect here between the real world and the world of bankers and finance. The global economy is in the most precarious position it has even been and this firm (let’s forget they’re called Google for a minute) have just posted $10bn of revenues for the quarter and growth in every area. Their main product, the one that delivers most of the revenues is advertising and for advertising to be effective you need to have consumers buying goods and services. So against the current economic backdrop they have produced results which are nothing sort of astonishing.
Sure, it’s right to be critical of the Company’s management if there are areas of the annual report which are not as good as they could be. Questions should be asked and people held to account for their performance. But surely we need a healthy dose of reality in this equation. Where else can you put your money these days and get a return of $9.50 on every share you own?
Perhaps if the analysts were looking deeper they could find some things to genuinely bring Google to task about, such as their removal of referrer data from searches when individuals are signed into their Google accounts. With a rise to 90 million Google+ users then this means a disturbing amount of data is being withheld by the company, ostensibly to protect privacy, but as this data is freely available on your Adwords account the argument doesn’t stack up. It’s a dangerous move by the biggest monopoly in the world and one that does nothing to enhance their reputation. Or what about their underhand tactics in Kenya where they tried to strip the Mocality database through nefarious means? Or how about the fact that as a monopoly they act as judge, jury and executioner for any website they don’t like? Or how about their integration of Google+ data into feeds but a reluctance or refusal to do the same with Twitter feeds? Or how about using their social platform enhances your website’s position in a way that the others don’t? Whatever happened to ‘Do No Evil’?
By all means bring them to account and push the share price down if they aren’t delivering, but hold them to account over things that they have done wrong, not things they have done right.