Friday, 18 April 2008

Google shares rocket

Google's Q1 results significantly exceeded analyst forecasts with net profits up 30% at $1.31b and revenues up 42% at $5.19b (Wow, a 25% net profit margin!) Research and development was up 65% to $673m. Datacentre-related costs have roughly doubled over the same period. As a result Google shares soared by 17% in after hours trading. Google shares had been particularly badly hit this year - down 35% from $691 to $449 before the results. So the after hours rally could be better described as a 'recovery' as, even at c$525, Google is still well down this year.

See Google soars as it growth weathers slowdown in 18th Apr 08. Also Lex on Google's firepower.

This, coming in a week that has also seen positive results from IBM and Intel and some quite encouraging Q1 PC shipment figures from IDC, is really serving as a much needed fillip to the tech sector. Expect further gains (recovery...) in NASDAQ today.

Google's results also have a bearing on the Yahoo/Microsoft bid situation. It should embolden Yahoo to "repel the boarders". If the search advertising market is doing this well, then Microsoft could afford to raise its bid. More likely, Yahoo might get support from others to enable it to remain independent (albeit in a much altered form) - thus ensuring further gains are to the current shareholders benefit rather than Microsoft.

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