Google’s Q2 Revenue: Only Up 58%? Losers.

Thursday, July 19th, 2007 by Jordan McCollum

Google’s Q2 Revenue: Only Up 58%? Losers.

Google Q2 earnings and income reports are in, disappointing Wall Street with only 58% growth YOY in revenue, 28.3% growth YOY in profits. I’m not kidding about Wall Street being disappointed. According to CNET, Google’s stock fell 7% in after-hours training, presumably because they only grew 28%.

Ten guesses what the top story on Yahoo Finance was when I just went to look at stocks.

That AP story reports:

The second quarter represented the first time that Google’s year-over-year profit hasn’t improved by at least 60 percent since the company went public in August 2004. What’s more, it’s just the second time Google’s earnings have fallen below analyst estimates in its 12 quarters as a public company.

Okay, there’s a point to be made there. Do we need another math lesson here? When you have a really big number (such as a very high revenue), it’s harder and harder to maintain a high growth rate, because the amount you have to grow to keep up gets bigger every quarter.

And $3.87 billion, Google’s total revenue, is a pretty big number. “Excluding traffic acquisition costs, or commission paid to content partners,” says CNET, “Revenue was $2.72 billion, greater than the $2.68 billion analysts were expecting.” ($1.15 billion went to traffic acquisition costs, in case you were wondering.)

So, wait… Google grows almost 30%, exceeds your expectations and . . . their stock price drops $40 in a matter of hours? It really is lonely at the top.

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15 comments on “Google’s Q2 Revenue: Only Up 58%? Losers.”

Andy Beal Says:

July 19th, 2007 at 7:45 pm

As Google’s revenue numbers start to flatten, I wonder if they’ll start issuing guidance.
DayNovo Says:

July 19th, 2007 at 7:53 pm

While Google certainly posted a miss today, is it fair to say that the stock “tumbled” after hours? For further consideration click here:
http://sneakybusiness.typepad.com/sneaky/2007/07/google-misses-s.html
Janet Driscoll Miller Says:

July 19th, 2007 at 8:05 pm

Jordan, I just had to say — LOVE the headline. Perhaps if Google were to actually FOCUS on their core revenue stream (AdWords) instead of acquiring every company they can get their hands on to try to “compete” with Microsoft, they might have had better earnings. Just an observation.
Jordan McCollum Says:

July 19th, 2007 at 8:34 pm

@Day–I never said tumbled. I said it “fell” 7%.

Perhaps I should have used something less “dramatic,” like “did not go up” or “moved in a nonpositive fashion”?

Your post is amusing .

@Janet–Thanks!
Steven Bradley Says:

July 19th, 2007 at 10:39 pm

Jordan I agree it’s a great title. Now if only I could be as much of a loser as Google.
Self Made Minds » Blog Archive » $1 million online competition and more!….. Says:

July 20th, 2007 at 6:20 am

[...] Jordan comments over at Marketing Pilgrim, do we expect too much from Google? [...]
TextAdSearch Says:

July 20th, 2007 at 6:49 am

What do they expect, there are only so many people on the planet. Maybe they will start giving free Googleputers to the third world!
Bushido Says:

July 20th, 2007 at 6:57 am

I agree with Janet on this one. The best headline ever in MP (no offense, Andy). The thing I don’t agree on is that they’re not doing well in buying every business they can get their hands on. Eventually they will own the market (literally). Am I frightened? Hell yeah!
Andy Beal Says:

July 20th, 2007 at 8:41 am

LOL – it was a great title, now I need to go think of some funny headlines.
Jordan McCollum Says:

July 20th, 2007 at 10:18 am

I gotta do my part to keep you on your toes, Andy.
Mark Barrera Says:

July 20th, 2007 at 11:48 am

Anytime you call Google “losers”, I am sure I am not the only one that will chuckle
Rich Minx Says:

July 20th, 2007 at 12:36 pm

It does seem a bit silly. I guess it’s like a kid with an A+ average coming home with an A.
Eduardo Fenili Says:

July 20th, 2007 at 12:59 pm

@ Rich
Actually, I would say its more like a kid with an A+ perfect score average coming home with an A+ in the 98% percentile:P haha
Study Guide Says:

July 23rd, 2007 at 10:17 am

Great title Jordan! Hooked me indeed. There will come a day when Google is forgotten, I wonder when…
This Week In SEO - 7/20/07 - TheVanBlog Says:

July 24th, 2007 at 12:22 am

[...] Google’s Q2 Revenue: Only Up 58%? Losers [...]