San Francisco: Google Inc.’s earnings and revenue growth decelerated more than analysts anticipated during the fourth quarter, magnifying worries that the Internet search leader’s moneymaking machine is bogging down as the US economy teeters on the brink of recession.
The quarterly results released yesterday spooked already jittery investors, causing Google’s slumping stock price to plunge 6.5% farther.
Google earned $1.21 billion during the final three months of 2007. That’s up 17% from net income of $1.03 billion in the same period a year earlier.
It is the first time Google’s quarterly profit has climbed by less than 25% since the Mountain View-based company went public nearly 3 1/2 years ago.
If not for stock awards given to its employees, Google said it would have made $4.43 per share - a penny below the average estimate among analysts polled by Thomson Financial.
The earnings would have been even lower if Google had not benefited from an abnormally low tax rate of 25% in the quarter. American Technology Research analyst Rob Sanderson estimated Google would have earned 11 cents less if the company had been taxed at its more typical rate of 27%.
Chief Executive Eric Schmidt rebuffed the notion that the feeble US economy undercut Google’s growth.
“I am happy to say we have not seen a negative impact from the rumours of a future recession,” Schmidt told analysts during a conference call yesterday.
Company co-founder Sergey Brin said in an interview that the company hasn’t seen evidence of the recent economic turmoil affecting its business.