A 39% revenue increase, to $5.37 billion, would be impressive by most companies' standards -- but of course, Google isn't most companies. Net income increased 34% to $1.25 billion, or $3.92 per share, falling short of analysts' estimates. The bottom line was hindered by a reduction in interest income, which doesn't indicate any weakness in operations. But the company's also noticed some choppiness in paid ad clicks; although they're up 19% from last year this time, they've dropped 1% from last quarter.
Recessions generally put the pinch on advertising, which can hurt many businesses that rely on or covet ads -- not just Google's direct tech rivals like Microsoft
Google may be able to fare better than others, but it simply can't stop consumers and advertisers from cutting back on spending during recessions. Over the last eight months, I've asked and asked why many investors thought it would be different this time, for this company, with major economic difficulties imminent. (So much for those $800 price targets analysts euphorically doled out for Google shares last fall!)
Google's shares are now a far cry from its 52-week high of $747, which could spell opportunity for long-term investors who yearned to buy the company at more reasonable levels. However, given the sputtering economy, I suspect that investors searching for cheap Google shares might get even better prices in the months ahead.
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