Google Stock Prices Boom
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Google’s fabulous quarter earnings eased slowdown fears. Fans enjoyed the biggest one-day Google stock rise — up $89.72, or 20%, to $539.26 — in the past two years as the Net search giant blew past earnings targets by avoiding a big drop in U.S. paid click traffic during the first quarter of 2008.
Wall Street had been a little pessimistic going into the earnings report Thursday, after ComScore (SCOR) surveys showed a third straight month of negligible advertising traffic growth related to domestic searches. The reports helped confirm suspicions that the drag of decreased consumer spending was starting to spread beyond retail and housing to the tech sector.
But the fears of a revenue slump at Google were overestimated as the company saw strong international paid click sales, and the effects of higher prices. Google reported 20% growth in overall paid click revenue over year-ago levels, which was down from the 30% pace in the prior quarter, but well above the 1.8% U.S. rate ComScore reported for March. ComScore flagged the U.S. slowdown but did not capture the bigger picture, namely Google’s expansion overseas, which accounted for 51% of total sales, up from 47% a year ago.
Analysts who had braced for a slowdown going into the earnings report quickly turned bullish after Google’s earnings were released.
One element of Google’s big performance may reflect well on rival Yahoo. Though Google gained market share in the first quarter at Yahoo’s expense, the health of the sector seems to be intact. This should give Yahoo some added sway in its standoff with Microsoft over the $42 billion proposed merger.
