Google Reports Weaker Than Expected Results

Search engine giants Google have today disappointed market analysts with weaker than expected quarterly results, just 24 hours after its closest rival Yahoo reported a similar slowdown in revenues as a result of the difficult market climate for advertising publishers in the wake of the US economic slowdown.

The results, which were hailed as weak in comparison to the levels of growth that were expected, saw growth of 17% over the last quarter of 2007, up to $1.21 billion despite previous predictions of a much more significant rise from figures on the year.

Sales over the final quarter also reflected growth, some 52% in fact, despite further predictions that the rapidly expanding giant should have been expecting more substantial improvements, up to $3.39 billion for the final quarter alone.

The results will now doubt be seen as an indicator of the wider implications of changes in the external economy in the US, where most of Google’s principal business is conducted.

Nevertheless it is unlikely that such growth, albeit lesser than previous analyst predictions, will trouble Google given that both sales and profits have continued to rise for the search engine, despite the obvious impact of the economic slowdown on its competitors and on a number of other ‘warm-weather’ industries like retail.

Meanwhile Google shares fell further in early trading to compound wider losses that have seen 18% wiped off the value of its shares, in light of the concerns over the US economy and the potential implications of the slowdown on the advertising industry, which tends to dry up in recession-tending climates.

It remains to be seen whether Google can maintain its growth in spite of the market climate, and indeed whether today’s results whilst weak will help push the company further ahead of its market rivals.

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