You are here Why isn't Google more "open" with investors?
Submitted by Scott Cleland on Fri, 2008-03-28 18:38
I must admit I have been amused watching the market's angst over trying to figure out if Google's growth is slowing down given that Comscore has reported that paid clicks have fallen 3% from January to February of this year.
First, I am amused because Comscore also showed that Google gained market share during that same period from 59.2% from 58.5%.
- I think many are missing the forest for the trees obsessing over the click volume stats from Comscore.
- Google continues to gain market share -- tipping their awesome monetization model towards even more dominance of online advertising; Google is improving its focus to increase the monetization yield from each search; and Google now has the incredible cross-marketing leverage and network effects that Double-Click affords.
- And per the WSJ article, Google also has low performance expectations to exceed as analysts are only projecting 24% growth in earnings and only 43% increase in revenues.
- Given that Google grew revenues at a torrid 51% rate last quarter when it missed expectations, this suggests that analyst expectations are projecting a 15% quarter to quarter deceleration in revenue growth!
- Hello, clicks are decelerating much less than that, if they matter much at all.
- Looks to me like a whole lot of over-reactive hand-wringing on the revenue side for next quarter.
- Now on the earnings side, there is legitimate angst about whether the Google empire-builders and chronic overspenders continue to spend most whatever they collect.
Second, I am amused because Google declines to comment as a company on the Comscore/click deceleration concern and provides "zero guidance" to the market per Morgan Stanley analyst Mary Meeker, who is known as the "Queen of the Internet."
- Isn't it ironic that a company like Google which is obsessed with "openness" is not more open with its shareholders?
- Google loves OPENNESS!
- So why does Google have such a hard time being open with investors in answering fundamental concerns about their business and providing the most basic form of forward-looking investment guidance?
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