Google Stock and Department of Justice
Jim Hedger feels that the Department of Justice suit against Google for not handing over search info has little to do with a drop in Google stocks last week. I wrote last week that there should be a relationship between the controversy and stock value, but DOJ trouble is certainly not 100% of the pie, citing bubbling expectations from Wall Street and other International worries, like Korea’s Daum & Naver dominance & Livedoor’s CEO Horie sitting in his jail cell right now for insider trading.
From Jim and the Stepforth SEO Blog:
As anyone with even a remote interest in search knows, the legal drama unfolding between Google and the DOJ fell out from the closet and into the public realm early last week, nearly a year after the DOJ initial request was complied with by Google’s rivals, Yahoo, MSN and AOL. Of the four major search engines in the United States, Google was the only one to resist the US Governments demand for information on searches conducted by its users.
Within days of the story breaking, Google share prices began to fall, showing a sustained decline for the first time since the search firm went public in August 2004. The sudden drop sent search journalists scurrying to their keyboards to make the unsubstantiated connection between the court case and the value of Google stocks.
What these commentators are neglecting to mention is that investors are becoming wary of the search sector, seeing the bulk of revenues coming from the single source of paid search advertising. Although Google AdWords and Yahoo Search Marketing continue to shower shareholders with positive results, Yahoo’s most recent financial numbers, filed last week, just before the Google share drop started, came in one-cent below investor expectations.
By the way, Goog is up $22.41 to $421.87 a share right now. Yahoo and Apple are also gaining today. Looks like there was not much wind in those Wall Street analyst sails.