(Reuters) - Google Inc reported third-quarter results that missed Wall Street expectations, sending shares down as much as 10.5 percent and weighing on broader markets after the release came unexpectedly early.
The plunge wiped nearly $26 billion off the company’s market capitalization.
JOE SALUZZI, CO-MANAGER OF TRADING AT THEMIS TRADING
“You can’t make those mistakes anymore. Bloomberg was saying in the report it looked like there was a ‘spot for Larry,’ I guess Larry Page, so it’s obvious this was some sort of mistake that went out too early. Mistake or not the earnings are earnings, the problem is when this happens in the middle of the day, there is no time for a conference call to massage it, there is no time for analysts’ questions and for an evaluation. Now you shoot first and ask questions later and now the market structure operates the way it has been set to operate - everyone run away, that is exactly what is going on.”
“The core business seems to have slowed down pretty significantly, which is shocking. I don’t think anybody saw this. Business grew 21 (percent) in the second quarter and now just 14.7 percent. Volumes look to be a little weaker than expected. We were expecting volumes up 37 percent and they’re saying 33 percent. We were expecting pricing down 13 percent and here they’re down 15 percent.
“The only conclusion l can look at is — search is happening more and more outside of Google, meaning people are searching more through apps than through Google search. That could indicate a secular change, especially when it comes to ecommerce searches. The big fear has always been — what if people decide just to go straight to Amazon and do their searches? And potentially that’s what could be happening.”
“We have been saying this thing was ripe for a pullback. It’s not like they’re Google not being Google, but you still have some major issues. Click prices declined for the fourth consecutive quarter after rising for eight consecutive quarters before then. That’s a negative. This is the mobile problem.
“The other bit is the Motorola millstone had been ignored by the market, and - boom - now you’ve got weak revenue from Motorola. When you acquire a business and you’re about to whack all kinds of people and close offices, you know what happens to the employees? They take their eye off the ball. Sales are down.”
Reporting By Noel Randewich and Edwin Chan in San Francisco