Google And The Market’s Need For Greed
Even though internet giant Google saw profit figures for the last 3 months jump by some 28% to $925 million, against “only†$721.1 million this time last year, the stock market wanted more! Analysts in the US had expected Google to beat recent profits of $1 billion in the first quarter of 2007, a move which never happened.
As you will probably have seen from the press, Google continue to tighten their grip on the internet, dominating not only the search engine sector but also the online advertising sector to name but two. While this does leave them susceptible to a worldwide economic slowdown, internet spending seems to be fairly immune from traditional highs and lows.
So where can Google go now?
The company have invested billions over the last few years, with the multi billion dollar acquisition of YouTube the biggest deal to hit the headlines. While many mocked the transaction, Google have more than made it pay for itself, even if the cost of copyright infringement court cases is continuing to mount.
Google have never been one to stand still, and they seem to be the first to notice the emergence of new business areas on the internet. Many people also forget that Google are a very cash rich company, with income from their Adsense / Adwords operations dwarfing many other companies on the internet.
Google have a habit of announcing surprising acquisitions, but they need to be bigger and bigger to make an impact on the overall group. Unfortunately, with increased size and spending comes increased risk.
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