The business stories that matter, by Fortune's Colin Barr
Type Size  -  +
February 4, 2008, 12:40 pm

Google shares dip below $500

Google’s (GOOG) aggressive comments this weekend on Microsoft’s (MSFT) bid for Yahoo (YHOO) aren’t helping its stock. Google shares, which fetched $600 as recently as the middle of last month, are struggling Monday to stay above $500. The stock briefly dropped as low as $498 and change in midday trading, down about 3%, before bouncing back to around $501. Google shares last sported a 4-handle back in August, before a late-year runup that briefly took the stock as high as $747 a share in November. Since then, the stock has lost more than $70 billion in market value. Still, the damage to anyone but the most recent buyers has been limited: Even after Monday’s declines, anyone who bought the stock before last June is still in the black.

Excuse me John from Fairfax, but don’t you mean “Your” instead of “You”?

Posted By John Wins Spelling, Va : February 5, 2008 6:37 pm

Think before you blog. You punctuation is awful.

Posted By John - Fairfax, VA : February 5, 2008 2:00 pm

I used to work for AutoDesk and they too feed their employees with free drinks,food.Having fun with Christmas bonuses is a plus too.I lived in the Silicon Valley during it’s boom and alot of parties were held everywhere on holidays by Tech Companies.Seems its still happening..Yay !

Posted By CycloneX Newport Beach.Calif : February 5, 2008 1:46 pm

I hope Fortune gets some more upgraded readers (or at least better blog posters), most comments here are jokes. The bottom line is that since internet advertising as a new market within the advertising industry is still in growth stages while TV and radio and other markets have matured, it is critical for Microsoft as a current technology leader to insure stable future market positions on the internet in search, site content networks and other ad distribution channels. Google also needs a strong competitor, too much power will just drive higher cost per clicks, impressions, etc and ultimately higher cost per customer acquisition online.

Posted By Parsa Sepahi, Boulder, CO : February 5, 2008 3:33 am

sell b4 it is too late

Posted By chicago : February 5, 2008 3:19 am

Many companies spend money on comfort items for their employees. Microsoft has fridges all over the place so people can go in and grab a drink so they don’t have to leave the campus. Don’t have the drink you want? No problem, just let them know. Why have employees leave the campus for an hour or more when you can pay a fraction of the cost to feed them and keep them at the office. It’s more productive.

Also, Apple is far from a better company. Go read Accidental Empires. They only do one thing really well and that’s push itunes (music, ipod, iphone)

Posted By Nick Baton Rouge, LA : February 5, 2008 12:55 am

I hope Google will buy Motorola if it wins 700 spectr

Posted By Anonymous : February 4, 2008 11:17 pm

Mass online advertising concept using keyword auction is fairly new. I have not seen any data related to the return on investment (i.e., do we know how much revenue an advertiser materialize per $1 spent on Google advertising). For instance, I advertise both on Google and Yahoo. My website receives many hits coming from Google and Yahoo (more from yahoo, surprisingly even though my advertisement is display more on Google site), however, the hits almost never materialize into real business. I believe that the ROI is not very good for most advertisers. Once advertisers (such as myself) are done experimenting, they are likely to move to another advertising channel.

Posted By noname, bay area, ca : February 4, 2008 10:17 pm

This is the beginning of the end of Google.It can’t stand MSFT and YHOO together.

Posted By Surba,Sunnyvale,CA : February 4, 2008 8:23 pm

Kevin, there are lot of examples where this kind of merger has worked before. Microsoft has rarely succeeded in innovating a lot of stuff; their first attempt is to try to make a better product than the market that the want to dominate. Sometimes it works, and the opposing company disappears into obscurity. When it doesn’t, they go out and make acquisitions to position themselves into the market. This is Microsoft’s core talent - what they are really, really good at. It is what made microsoft Microsoft. The real question is not whether it works, but whether Ballmer has the skill to do it. Most likely, Gates is going to be deeply involved in this, though, so it is probably not an issue.

Posted By Byron Raum, Beverly Hills, CA : February 4, 2008 6:02 pm

Google is the next Enron.

There will be a better search engine that comes along. We’ve gone through what? 3 big ones since the internet conception?

Also, I believe Google spends too much $$$ on its employees. Free lunch everyday, free launday, movies, snacks, etc…it adds up.

Im glad Google is getting some exposure now over Apple (who has the better revenue model..real life products).

Apple is a much better company then Google is any day.

Posted By James, VA : February 4, 2008 5:56 pm

The 3.5 mil a year company that I wrk for pays google 750k a year for advertising. It is very real and outperforms all other advertising outlets.

Posted By Mike, Bloomington IN : February 4, 2008 4:51 pm

The revenue model is not a hoax. It works. Question is: can you justify a significant portion Google’s market valuation on it?

The problem with it that it is effectively a tax on potential partner revenue, not actual revenue. So I think it’ll be a lot more volatile. Therefore, when/if an economy tanks, it can drop a lot more than the overall economy. That is probably what is happening now.

Posted By psh, newton, ma : February 4, 2008 4:17 pm

@anonymous

Obviously you don’t quite understand how these ads can, unlike normal advertising, be tracked down to an individual sale.

So unless business get tired of paying Google and Yahoo to bring in customers I’d say that the ad revenue model is actually quite real.

Posted By Paul, NY NY : February 4, 2008 2:07 pm

LMAO at the last two comments. I smell a great GOOG buying opportunity here. Combining two crap comanies together does not make a good one. Any examples of where this has worked before?

Posted By Kevin, Costa Mesa CA : February 4, 2008 2:04 pm

Seeing Google go from invincible to very mortal with some warts in a few months is very disconcerting. One wonders if all these distractions with contest to the moon, etc is not distracting the Google boys.

Posted By Robert Mallow, NY, NY : February 4, 2008 1:50 pm

YHOO & MSFT will crush GOOG

Sell, Sell, Sell

Posted By Joe, Chicago, IL : February 4, 2008 1:41 pm

Ad revenue model is a hoax, both Yahoo and Google have built a business on it. Microsoft is paying too much for this junk.

Posted By Anonymous : February 4, 2008 1:34 pm
CNNMoney.com Comment Policy: CNNMoney.com encourages you to add a comment to this discussion. You may not post any unlawful, threatening, libelous, defamatory, obscene, pornographic or other material that would violate the law. Please note that CNNMoney.com may edit comments for clarity or to keep out questionable or off-topic material. All comments should be relevant to the post and remain respectful of other authors and commenters. By submitting your comment, you hereby give CNNMoney.com the right, but not the obligation, to post, air, edit, exhibit, telecast, cablecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comment(s) and accompanying personal identifying information via all forms of media now known or hereafter devised, worldwide, in perpetuity. CNNMoney.com Privacy Statement.
Colin Barr covers business and finance for Fortune.com. Previously he was an editor at TheStreet.com and author of the weekly Five Dumbest Things on Wall Street column, and an editor at Dow Jones Newswires.
Subscribe to Daily Briefing: RSS feed | email newsletter