Slow growth not enough to satisfy investors

Google (GOOG) reported solid earnings, record Android numbers and 25 percent year-over-year growth on Thursday but failed to satisfy analysts and investors, who noted that growth was slower than previous quarters and that its average "cost per click" (CPC) price had gone down for the first time in two years. Though the stock initially rose on the increased revenues, later analysis of the results triggered a sharp fall-off that saw the company lose nine percent in after-hours trading.

CEO Larry Page emphasized earnings and growth, positioning the company as being ready for an upbeat 2012 through continued growth of Android, GMail and its social service Google+, but analysts hounded Page over the eight percent decline in CPC revenue, reports AppleInsider. Executives pointed to currency fluctuations and format changes as the culprits, indicating that they believe it to be an outlier, but analysts may be fearful that lower rates for mobile advertising may continue lowering the average as mobile continues to expand.

Google reported $10.58 billion in revenue for the final quarter of 2011, with net income up from $2.98 billion a year ago to $3.51 billion in the fourth quarter. Though the company's revenues increased, it was not as strong a performance as analysts had expected, and tailed behind surprisingly strong performance from Microsoft, IBM and Intel. Microsoft and Intel both managed to beat expectations, each in part through increases outside its core business.

Investors are said to be unsure of the planned buyout of Motorola Mobility, fearing that Google getting into the hardware side of the business will spur competition with the carriers it currently caters to as the main customers of its Android mobile OS, much as Microsoft did when it began competing with MP3 player partners it had signed up for its "Plays4Sure" DRM scheme with the Zune. The low-margin world of mobile hardware may also impact Google's bottom line, analysts have said. [via AppleInsider]

Apple will report its fiscal first-quarter (calendar Q4) earnings during a conference call on January 24th. Wall Street consensus and Apple's own guidance have indicated a record holiday performance, particularly with iPhone, iPad and Mac sales. The company very briefly hit a market capitalization of $400 billion on Thursday. [via AppleInsider]

By Electronista Staff