Shares of Google took a dive Tuesday, as the company's CFO told investors what they wanted to hear least. The growth - she is a-slowin'.
In a rare confrontation with the public, Google's CFO George Reyes dropped a doozie. "Most of what is left is just organic growth," he said on a Merrill Lynch webcast, according to Reuters. "Clearly our growth rates are slowing. We see that each and every quarter. We are going to have to find new ways to monetize the business."
That gem of wisdom caused the Google fanboys to pause for a moment and then sell off their shares at pace. Google's stock dropped as much as 13 per cent on the day before regaining a bit of ground as nerves calmed. Google ended down more than seven per cent by market close at $362.62 per share.
Close to 100 per cent of Google's revenue comes from its web search ad business, which you've all grown to know and love. And, given that fact, it's no wonder investors are concerned about a lack of growth.
Google has not proven itself terribly adept at new money making ventures. Its Google Video service, for example, still has just three episodes of CSI up for sale close to two months after Google launched its partnership with CBS. A company that can't hawk the hottest show on television can't hawk much - well, except for boxes of text.
Investors should remember that Google places "Do No Evil" as its mission and has said that making short-term profits to please shareholders is not the primary motivation driving the company. Where selling out to China fits into those claims remains anyone's guess. ®