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Google Could Miss Estimates Big Time

I want to make you aware of recent statistics that show Google (GOOG) U.S. paid clicks showing no growth during the first two months of the year. Searches in the U.S. are up soundly, and International business booming, but clicks are where GOOG makes its money. (U.S. paid clicks are expected to rebound in March.) I have been selling GOOG during the last month — afraid the stock could drop when earnings are released mid-April. 

GOOG’s P/E is only 23, so I don’t see a big fall from here, but I have been lowering our exposure by selling shares and investing in our other stocks. Don’t give up on this company altogether. GOOG’s just purchased DoubleClick, the company that runs many of the picture and flash animated ads you see on websites, and that purchase will pay off by next year. Cell phone searches will be the next big money maker. 

That being said, Google is plowing money into new technologies as core revenue slows, which could mean flat profits year-over-year. I’m not saying this worst-case scenario will happen, just be prepared.

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