This article is more about investment in stock, however I think it should be included on this site because of the general public’s limited view point about Google being the only search engine.
Google’s earnings came as a huge blow to the internet giant, as rising costs and falling margins led to an important selloff in the stock driving its price down to values not seen since October 2010. A management reshuffling, with co-founder Larry Page taking the helm from Eric Schmidt after a decade, and the questioning of its dominance by competitors, from Mark Zuckerberg’s Facebook to Microsoft’s Bing, have cast shadows of doubt over Google’s future. Analysts and experts, though, seem to agree that higher costs are a near-term burden which will result in the realization of growth potential in the near-future.
Despite impressive top-line growth, Google’s stock fell 8.33% since it posted its first quarter earnings erasing about $15 billion in market cap. Apart from missing EPS expectations by two cents, posting adjusted earnings of $8.08 per share, investors were worried that Google is spending too much money. Operating expenses were up 56% to $2.84 billion, traffic acquisition costs (TACs) were up almost 20%, and margins fell to 37.6% from 41% in the first quarter of 2010. Bloomberg even noted that the company went on a “hiring binge” after Google announced it had added 1,900 people to its payroll in the quarter and raised salaries by 10%. “The concern is that the expense discipline may be leaving as Eric Schmidt steps away,” a Benchmark Co analyst told Bloomberg. (Read Google Misses Estimates, Triggers Sell Off).