Google’s Profit Growth Declines to Meager 17%

Thursday, January 31st, 2008 by Andy Beal

Google’s Profit Growth Declines to Meager 17%

After managing a 46% profit increase in Q3, Google could only manage a meager 17% growth in Q4 2007 (compared to Q4 2006). Wall Street rewarded Google with a 7% after-close stock plunge.

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Google earned $1.21 billion, or $3.79 per share, during the final three months of 2007. That’s up 17 percent from net income of $1.03 billion, or $3.29 per share, in the same period a year earlier.

More Bad News

The number of people clicking on AdWords rose just 9%–which was less than analysts expected–mostly in part due to Google’s efforts to filter out what it calls “accidental” clicks.

More bad news came from the revelation that the company struggled to maximize the revenue from its partnerships such as MySpace.

A Little Positive

On the good news side, revenue was up 51% to $4.83 billion (from $3.21 billion the previous year).

With talk of a pending recession, and Google failing to show growth with non-search ad channels, the company could face further reduction in its stock value over the coming months.

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10 comments on “Google’s Profit Growth Declines to Meager 17%”

Jordan McCollum Says:

January 31st, 2008 at 10:21 pm

Revenue up 51%? Pfft.
Utah SEO Says:

January 31st, 2008 at 10:23 pm

I’ve been watching Google’s stock plummet. They were over $700 a share and now they’re $564 today.
Peter heirman Says:

February 1st, 2008 at 8:30 am

Maybe people actually click less on Adwrods/Adsense links.
Do you click on these links ?
Probably not.
Jeff O'Connor Says:

February 1st, 2008 at 8:36 am

Oh my God! A large, profitable company with an enormous user base not beating wildly unrealistic expectations about *profit*?!

Clearly, this outfit is done. Yep. Over, finished, kaput. Call the private equity thugs and let’s get this turkey carved-up before they stink up the place with their less-than-expected *profits*.

What’s that? This is Google we’re talking about, not Yahoo? Oh, well, then I guess that makes it O.K. then. I mean, Google is the “it girl” of the IT press and public imagination so they get a free pass.

For now.

By the way – I have a $100 million I’d like to sink into the Next Big Thing (TM) – anyone like to recommend a proven, profitable business for me to sink it into? I hear that Facebook might actually turn a profit one of these days…
Andy Beal Says:

February 1st, 2008 at 8:41 am

@Jeff – I hear Marketing Pilgrim is profitable!
Futon-Matt Says:

February 1st, 2008 at 1:17 pm

Wow, I’m glad I didn’t invest in Google.
Steven Bradley Says:

February 1st, 2008 at 1:31 pm

I wish I was as unsuccessful as Google in Q4.
Alan Johnson Says:

February 2nd, 2008 at 8:26 pm

For them, anything which is not a huge success is seen as a failure and that is actually a good attitude and they will most likely see the 17% as a little reality check.

Alan Johnson
Dean Says:

February 4th, 2008 at 1:00 pm

I didn’t invest in Google too
biyografi Says:

May 29th, 2008 at 1:40 pm

Maybe people actually click less on Adwrods/Adsense links

Marketing Pilgrim