RSSGoogle CFO Sees Slowing Growth
By Ed Oswald | Published February 28, 2006, 3:21 PM
Investors panicked over comments made by Google Chief Financial Officer George Reyes Tuesday, sending shares of search engine giant down as much as 14 percent by mid-morning before halving those losses. Reyes warned that he saw slowing growth on the horizon, and said Google would need to find new ways to make money.
"The search monetization gains have now been largely realized," Reyes was quoted by CNBC as saying at a Merrill Lynch investor conference in New York. Google follows a policy of not commenting on financial targets, which leads to wild swings when it misses what analysts expect it to make.
Thus, the swings could largely be attributed to Google itself and its reluctance to provide any sort of guidance for investors.
Analysts said that investors had overreacted to Reyes' statements, pointing to increasing market share and ad revenues. They also said that Reyes' speech largely was bullish, and the concerns over a possible slowdown in growth came at the very end.
Many believe Google's valuation is almost certain to recover after the company holds its annual Analyst Day on Thursday.
"The CFO's comments that they are going to have to find other ways to monetize the business should be taken positively, as we believe that this indicates that Google will aggressively purse other revenue streams," Piper Jaffray analyst Safa Rashtchy was quoted as saying in a research note.
However, further comments from Reyes at the conference may explain his concern, with the Google CFO indirectly asking investors to be more realistic in their expectations of further growth for the leading search engine.
"We're getting to a point where a law of large numbers starts to take root. At the end of the day, growth will slow," Reyes said. "Will it be precipitous? I doubt it. I am not turning bearish at all. I think we have a lot of growth ahead of us. It's a question of what rates."
As foretold, the monster Google slowy sucumbs top the reality of planet earth with many beaten breasts..
You like I said Googles days at the top are limited.
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|I'm shocked that people didn't think the [2600%*] growth would slow down after a while. :D
*may have been a slight overexaggeration.
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|slight ????
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|Relax people!!!
The Google CFO is playing it very smartly. Everything in today's business world is done with a purpose, as far as my knowledge goes they still have lot of products to be launched but I am not sure if those products can really generate good revenues for the company.
My List for their future products are:
* Web browser
* Internet Service Provider
* Telephone Services
* Operating System
* Something Like PayPal
Good luck to GOOGLE for what it does !!!
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|"* Web browser
* Internet Service Provider
* Telephone Services
* Operating System
* Something Like PayPal"
i too have heard of all those, still what really came from them was some free candy's. if they are planning to launch some web browser then i don't get why they are sponsoring ff(still they can come up with a ff based browser) and looking at their freeware competition they will never be able to make money from a browser.
isp,telecom can come true though.
OS is one of those things i don't believe will be launched soon, and i don't think they will challenge the thing through which they reach their users.
again paypal is possible but it will require a lot of time(most of financial services companies are very old)
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|Im suprised google hasnt got an Ebay clone.
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|Shares are down 14% eh? Thats what you get after going public IMO. The only reason to have an IPO is to make a quick buck (or a quick few billion in google's case). Going Public doesnt help the company or its employees, who are now both at the whim of wallstreet.
After you go public, you lose the ability to say "dont be evil" and your new corporate motto becomes: "keep investors happy, or we are all toast"
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|Google is going to take over the world.
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|I doubt it, other than their search engine all their other ideas haven't been doing so well. I think eventually some other company is going to catch up and pass them with a new search engine and Google is toast. They probably won't disappear but they'll become about as relevant as other has-been search engines like Alta Vista.
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|i agree with Skyfrog 100%.
netizen dumped yahoo and other popular search engines in those when Google came, so if there is something better tomorrow people will dump Google too.
look at M$ origami project, they understood that too much hype is not good, but i don't think if Google understands that. it has been years that i have seen anything new that makes money for them,stuff like Google Earth, talk, mail,pikasa is cool but i don't think anybody is going to pay for these, at the same time i read somewhere that they are providing all these so that we people like "sheep's" can visit one of their sites and that way they can make money using ads. For so many years media is adding more and more hype to Google and i think this just might take them down, i have read that they are making many things (i only remember OS coz nothing till now has come true) and all this is claimed by media. Google the way it is not bad but their share price means that share holder have VERY VERY big expectations.
all because of that i feel that Google will never be as cool they are now.
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