Online ad-slump fears: Google stock price sinks
Google's stock price sinks below $448 per share, but was slightly above 463 dollars in after-hours trading at 0300 IST (Wednesday), representing a 17 per cent drop for the day.business Updated: Feb 27, 2008 11:02 IST
Google's stock price sank in the wake of a report hinting that boom times may be over for the Internet darling's money-making online advertising.
The number of click ads in January was essentially the same as it was in the same month a year earlier, and dipped seven per cent from December, a month known for major holiday shopping, according to industry-tracker comScore.
Google's stock price sank below 448 dollars per share on Tuesday but was slightly above 463 dollars in after-hours trading at 0300 IST (Wednesday), representing a 17 per cent drop for the day.
Investors evidently fear the comScore figures signal an end to Google's years of exponential revenue growth.
Google was founded in 1998 by Stanford University students Serge Brin and Larry Page. Its stock price rocketed after its initial public offering price of 85 dollars per share in August of 2004.
Consistently strong earnings and its crown as king of Internet search drove the price to nearly 750 dollars per share in October of last year.
Google's quarterly profits have topped a billion dollars, with most of the money coming from Internet ads that advertisers only pay for if clicked on to activate online links.
However, Google has been confronted with concerns about "click fraud," bogus clicking on Internet ads by competitors or crooks.
Google has explained while discussing earnings in recent quarters that it is taking steps to reduce click fraud, and to improve relevance and reduce numbers of ads displayed on search pages.