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Google Beats Estimates, Stock Flies

Am I allowed to say I told you so?

Not so long ago I criticized analysts for not understanding Google.

This is a situation where Google is not listening to the street at all when making decisions about how they tweak their platform, and it will benefit them in the long run.

Thank goodness we have Henry Blodgett to tell us that Google has a good business after all. For you youngsters out there who weren’t hemorrhaging stock options through the dot com bust, Henry Blodgett was the pied piper of internet stocks in the big pre 2000 run up. He was later caught in a securities fraud investigation and is now banned for life. But that doesn’t preclude you from getting a great job on TV, of course.

Funny: He was caught by a randy fellow New Yorker - Elliot “Wire Transfers are Stupid” Spitzer

I’m watching with some bemusement this morning at all the financial news surrounding Google’s ‘deceleration’. This absolutely kills me. Here are some snippets:

Mary Meeker, Morgan Stanley: Meeker writes that she still thinks Google’s fundamental business trends are intact. But she also calculates that if ComScore’s data are accurate, and assuming international paid clicks are growing at a 35% rate, the company would have a blended click rate growth of 19%, or 4% sequentially. That, she says, would imply net revenue of $3.52 billion for Q1, or about $120 million short of the $3.64 billion consensus. Meeker, though, is sticking with her above-consensus estimate of $3.72 billion.

Youssef Squali, Jefferies: “While Google’s actual numbers are likely to be materially better than what’s being reported, ComScore’s less than flattering growth trajectory for GOOG does point to continued decelerating growth, and is likely to keep the stock under pressure short term.”

God forbid - DECELERATING GROWTH - AGHAST…

Did anyone catch the revenue number?

$3.52 billion for Q1

I wish I could decelerate like that.

These analysts treat Google like a manufacturing or retail company. They don’t understand online advertising in the slightest. Apparently everyone is up in arms over the fact that -

“The click-through rate grew 3 percent in February compared with a year earlier, and January saw no increase compared with January 2007. Several months earlier, the rate was growing 25 percent to 40 percent compared with a year earlier. The new data is in line with click-through declines Google reported last quarter.”

This is a situation where Google is not listening to the street at all when making decisions about how they tweak their platform, and it will benefit them in the long run.