Google was rocked by two issues this week – disappointing quarterly results, and their accidental early release.
The results for between July and September of this year were themselves disappointing, with quarterly profits falling 20% from the same period the year before, to $2.18billion – approximately £1.35 billion. This was lower than had been expected. Google’s average income per click fell 15% for the quarter. The massive switch to accessing the internet by mobile devices has sparked fears that Google is losing traction with advertisers and not monetizing in the way it has traditionally done with PCs.
However, to make matters worse, the results were published prematurely before the document had been signed off. This surprise meant nobody was ready, and it did not give Google the opportunity to market and explain the figures. This led shares to plunge by 9% - around $20billion - leading to trading in Google shares to be suspended for over two hours whilst Google frantically worked to get the document finished. By the end of the day shares in Google were down 8%, a slight recovery on earlier, but still an easily avoided disaster. Google blamed its financial printing firm, RR Donnelley, for the accidental release of its trading figures, which included the phrase “PENDING LARRY QUOTE”, indicating it was still in draft form.
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