It may be one of the world’s great hi-tech companies but Google yesterday saw its shares plunge after a “fat finger” computer mistake saw hugely disappointing results for the company released prematurely.
The web search giant’s stocks crashed by as much as llpc and wiped more than $22bn (£13.7bn) off the value of the company after the inadvertently published figures revealed a 20pc fall in profits.
The announcement was scheduled for publication after markets closed in New York, but they were accidentally published four hours early.
The release even contained a space for a quote from Google’s chief executive, Larry Page. The mistake sent Google’s share price plummeting – before their trading was suspended, more than 9pc down at $687.30 – amid tears that the stock would crash.
Google rushed out a statement shortly after the results, saying that its financial printer, RR had filed an early draft of the company’s results without authorisation.
“We have ceased trading on Nasdaq while we work to finalise the document. Once it’s finalised, we will release our earnings, resume trading on Nasdaq and hold our earnings call as normal,” it said.
The company, which earlier this month surpassed Microsoft in terms ot value, saw its third- quarter profits slide because of spiralling costs and a decline in advertising prices. It delivered revenues of $11.3bn in the third quarter, but these fell short of analyst estimates of $11.8bn, while profits tumbled to $2.18bn, down a fifth on the $2.73bn made itthe third quarter last year.
Google’s filings with America Securities & Exchange Commission revealed a worrying drop in the amount of money the technology giant receives for each advert users click on its website.
It’s average income per click fell 15pc over the three months to the end of September sparking fears that it is loosing traction with advertisers and failing to monetize Internet usage on mobiles as it has done on the traditional personal computer.
Motorola mobility, the mobile manufacturer acquired by Google, accounted for 18% of Google’s revenue or $2.58bn. Google also revealed that it plans to make significant capital expenditures reviving concerns and the amount of money it is spending on expanding its operations and hiring staff around the world. The company is total cost shot up by 71%, despite commitments to cut staff in some of these divisions.
Analysts were alarmed by the amount business has declined. “The core business seems to have slowed down pretty significantly, which is shocking” said Sameet Sinha at B Riley. She said the shift could be driven by a drop in Google’s popularity as a search engine, as people starts searching more through apps.
“The big fear has always been what is people decided just to go straight Amazon and do their searches? And potentially that could be what’s happening”