Google slowdown gouges stocks

This just in from Fortune’s Scott Moritz:

New numbers point to more slowing in Google’s (GOOG) search ad traffic, causing analysts cut their numbers.

The troubling trend that first appeared in January continued last month, particularly in total search volume and in paid clicks, according to data released late Wednesday by research shop comScore. The report says Google’s February search traffic fell 4.6% below the January level and that paid clicks fell 3% for the same period.

This is particularly bad news since it appears to confirm a trend that Google disputed last month, and it also is the closest read on the pulse of Google’s revenue growth. If the comScore numbers are accurate, paid clicks are on track to be down more than 12% for the quarter. As PiperJaffray analyst Gene Munster points out in a report Thursday, the downward trend does not match the 8% sales growth rate Wall Street is looking for in the first quarter.

Piper now expects Google to report sales to be flat to up 5% over the fourth quarter. That is down from the 8% prior target. Lehman also cut its first quarter estimate to about 6%, citing weak consumer market and potentially lower advertising budgets.

The news knocked 3% off Google’s stock price early Thursday, and sent shares in other tech bellwethers such as Microsoft (MSFT) and Intel (INTC) down 2%. The company’s shares have fallen by a third so far this year.

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Very good read Colin, here’s another Colin to follow ~

These are the psychological insights we took away. The CC was a tag team event of many geniuses and muchly appreciated by many we’re sure. Often times, a CC has one or perhaps two executives being involved, Google is different. Google had five executive managers involved in the Q/A and everyone was very prepared and minced no words. Eric was very forceful about the macro economic environment not affecting Google. He added that it may actually help its pricing, even in the foreclosure/mortgage mess at the 52m mark; we were impressed and happy for the bulls.

The analyst from Jeffries and Co, Youssef Squali, who downgraded shares, we assume just listening from afar with mouth wide open. We all make mistakes, but his downgrade looks completely wrong after this CC and a $75 up move in Google! Canaccord Adams analyst, Colin Gillis, initiated Google a buy on January 29th, and therefore his universe of stocks under coverage must be followed closely.

In conclusion, the CC was a tag team of five Google executive champions. DCLK was mentioned a lot, and annunciated with great excitement at least 5 times. YouTube explosion and the fact Google has surpassed the 50% revenue barrier outside U.S. bodes favorably in our opinion. We come away convinced the DCLK and Google synergies will get greater as time goes by; therefore, why don’t our readers consider competitors like Valueclick (VCLK), currently fetching a measly $17? Perhaps they’ll be the next ones bought on the cheap…
http://psychologyofthecall.blogspot.com/

Posted By stan, hot springs, ar : April 18, 2008 2:15 pm

The Wall Street analysts often miss seeing the enire picture. They seem to focus too much on numbers and not intangibles like geo-political issues. Google slow down has to do with mant macro factors not explained by most analysts covering the stock. Look at the troubles in China with Tibet and the Dalai Lama; the Olympics were supposed to be their time to shine, and now what, Shanghai down 44% from its 52 week high. Not hearing enough about the macro environment from analysts these day…
Here’s a very insightful analysis we need more of, it’s on Baidu.com:
http://psychologyofthecall.blogspot.com/

Posted By Stan, Hot Springs, AR : March 27, 2008 11:01 am

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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.

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