Google's shares dropped more than 8 percent this morning after the company's fourth-quarter earnings report disappointed analysts. The fall cost the company nearly $17 billion in market capitalisation.
In fact Google reported net revenue GROWTH of 28 percent. But The company's adjusted earnings per share at $9.50 was well short of the average analyst estimate of $10.49.
Google blamed this "failure" on unfavourable foreign exchange rates and some recent changes in its search and advertising algorithms.
Analyst Josh Olson, of the Edward Jones investment firm, told the San Jose Mercury News he was concerned about an 8 percent decline in the amount advertisers pay Google each time a user clicks on an ad. But he said he was confident Google would " make the right adjustments and get the formula right."
Other analysts looked on the positive side . Eric Bleeker at Motley Fool said, "Here's a company that's just reported better than 25 percent growth.There's not a single big company not named Apple that wouldn't kill for those results."
Google CEO Larry Page' said he was "very happy with our results. Google had a very strong quarter." However, said the Mercury News , some investors and analysts were concerned about the amount Google has been paying out while increasing its workforce . Google's spending increased 35 percent from the previous year.
"Google looks more mortal this quarter," Colin Gillis, an analyst at BGC Partners, told Bloomberg News. "A lot of what Larry Page is doing is a lot more tolerable to investors when the business is firing on all cylinders."