Own GOOG Stock? Sell.

It was a dark dark day for Google today. They had the misfortune of having to announce to the world that in Q3 of 2007 they only were able to attain increases of 57% compared to Q3 of 2006 which results in, wait for it, a measly 9% increase over Q2 of this year. This dismal display by Google is sure to result is some serious drops in their stock values.

Eric Schmidt (Google CEO) tried to make light of the situation with the following:

“We are very pleased with the impressive growth we experienced across our business. Our core search advertising business experienced continued momentum driven by growth in monetization and traffic, and we are creating a wider and deeper ads system through our focus on innovation, bringing more ad formats to our advertisers. Our efforts to offer more products and services in international markets as well as effectively grow our technology infrastructure and add to our deep talent base during the quarter helped to deliver growth by enabling Google to reach more users around the world.”

What he should have said was:

“I’m sorry to all the shareholders of Google stock (including Sergey and Larry). I don’t know how the company could be suffering like this under my benevolent rule. I mean, 9% over a whole 3 months! You all must be asking yourselves what we’ve been doing. I got so caught up in acquisitions and adding in new revenue streams that I totally forgot to micro-manage and make sure our shareholders would be happy. I understand why we’re going to get the spanking we will by shareholders who forget that we’re heading into Q4 – the most lucrative quarter. Sergey, Larry and all of you who own shares, I’m sorry – I’m going to go home and cry now.”

It has always driven me nuts that Google shares drop when they only show single digit increases. Drives me nuts? Well I suppose that’s the wrong emotion. Makes me laugh is probably more accurate. Only Google could lose when posting gains like that. 🙂 We’ll see how tomorrow goes. Who knows, maybe investors have gotten smarter than they were a couple years ago.

Now, moving on from my tongue-in-cheek analysis of the basics of the Q3 results, here’s a summary of the Q3 2007 report:

  • Google revenues were $4.23 billion
  • Google sites generated $2.73 billion (65% of total revenue)
  • Partner sites generated $1.45 billion (34% of total revenue)
  • Revenue from outside the US totalled $2.03 billion (48% of total revenue)
  • Google paid $1.22 billion to acquire traffic (the majority was to AdSense partners)
  • Operating expenses hit $1.25 billion
  • Net income was $1.07 billion
  • Google has cash, cash equivalents and marketable securities totaling – wait for it – wait for it – $13.1 billion. (holy cr@p !!!)

So watch the stock reports tomorrow and sell early. As you can see – Google is in bad shape and the day will prove it. And if I’m wrong and the stock goes up tomorrow – I’ll pass on a free link to my bud rumblepup. When I made him wrong I got a link so it only seems fair that if I’m wrong, he should get one. 🙂

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