Early Google Earnings Report Affects Facebook

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Google accidentally posted its third quarter earnings results early today. The search engine giant’s shares lost $68, or more than nine percent, to trade at $687.30 on the NASDAQ earlier today.

At 1:30 p.m., Google issued a statement that supports the theory that the release was posted inadvertently, saying the company's financial printer, R. R. Donnelly, "filed our draft 8K earnings statement without authorization."

This isn’t just news that affects Google. Facebook tanked after the premature release.

Image via Business Insider

The earnings report show that Google’s ad revenue rose 19 percent to $11.5 billion and total revenues, including Motorola Mobility, were $14.1 billion. Although Google's earnings release shows it is still getting increased ad sales, it's making up in volume what it's losing in profit. The money it gets for each click is declining overall.

“It is not surprising that with Google’s price per clicks going down that Facebook, who just got a bounce from a nice increase in mobile ads, which has been a sore spot with investors, is seeing its stock punished too,” said Peter Bernstein, senior editor, TMC. “Silicon Valley, where both companies are headquartered, is not a happy valley today.”

The money Google gets for each click is declining because of its massive mobile ad business. According to Business Insider, mobile platforms have added a vast new supply of cheap inventory, and when supply outstrips demand, prices fall. The growth in aggregate paid clicks is declining and the price per click is declining too.



It was noted in the premature Google posting that space was left “PENDING LARRY QUOTE.” This refers to the typical explanation of the results that will come from Google CEO Larry Page. Not only is he going to have to explain the overall results, but he is going to have to discuss what happens next quarter.

Stay tuned to TechZone 360 as Google hosts its earnings call at 4:30 this afternoon.




Edited by Rich Steeves
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TechZone360 Web Editor

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