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Google Stock Drops 9% After Quarterly Earnings Leak. So The F**k What?

Eric McBride
12

 

Man oh man how I love watching tech and news sites blow everything out of proportion! If you haven’t heard by now, Google stock plummeted almost 9% after their quarterly earnings were accidentally leaked early. Since then, tech and news sites are preaching about the “devastating blow for Android”, and “Apple’s attack starting to hurt”, and how Android is “bad business for Google” blah blah blah neener neener neener. Look guys...I’m no stock analyst, but I’ll tell you one thing right now: Don’t be overly concerned about Google’s bank account taking a hit at this point in time. Instead, be HAPPY that it's happening now, and here’s exactly why.

Remember one thing before I continue: Google just very recently surpassed Microsoft to become the 2nd most valuable tech company in the world, and just a few weeks ago, their stocks hit their all time HIGH. Yes, Google stock went down almost 9%...yes, their net revenue fell from 11.83 billion to 11.33 billion...yes the $9.03 per share was short of the predicted $10.65 earnings per share...and yes, net income went from 2.73 to 2.18 billion. Lastly, yes, click advertisements, while increasing 33% this year, suffered a click per clilck loss when compared to last year. Yes, Google is aware of it, and yes, they naturally need to watch out. Now that this is out of the way, let’s get down to why it doesn’t freaking matter as much as these doomsday sites are prophesying.

Tech sites and news sites are saying that Google’s core business took a hit this quarter. That’s fair enough. But they are also saying that their mobile sector is the main culprit. Others are blaming Motorola for being the issue. Remember, Google spent 12.5 BILLION dollars on Motorola this year, and have now started MAJOR restructuring. In other words, Motorola is costing them a LOT of freakin money right now. So how is this a good thing?

Well, to all you tech sites out there preaching Google’s and Android’s doom, I ask one question: What did you expect to happen? Did you think that after buying Motorola that Google would just sprinkle some GOOG juice on them and that they would then start magically growing  money trees? Motorola was doing BAD when Google bought them, which is probably why they agreed to a buyout in the first place (duh?).

Google is now losing money partly because they are spending tons of money to whip Motorola’s lazy butt into shape, and believe me...that will take a lot of time, and a lot of money. They also inherit Motorola's debt too, so don't think this purchase is all double rainbows and flowers. Google however, it already starting that needed restructing, and I could care less if their stock fell 9% due to them investing tons of cash in Moto if that's what it takes to get them producing the best Android phones ever made. Of COURSE this will cost money, and of COURSE Google will have to take a hit. But until you see another search engine making massive gains where Google is losing, all these news sites should seriously stop blowing this out of proportion. My God...they act like Google is Facebook, and literally has close to no freakin way of generating revenue. 

So be happy stocks have fell a bit, be happy that Motorola is costing Google an arm and a leg, and be happy the GOOG is investing huge amounts of money to get Moto in shape and ready for battle...because that financial investment and some of those losses they are taking might just put them in a position to stick it to Apple and Microsoft harder than they have ever done before.

So whip em into shape Google, and bring on that Googlerola Nexus line. 

Picture credits: www.swapmeetdave.com

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Comments

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  • denis ganev Oct 19, 2012 Link

    хорошо

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  • Mag J Oct 19, 2012 Link

    Well said Eric. Google isn't Facebook . At the same time, this may be a bit of slight indication for them to recheck the path and start doing what they are good at innovating.

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  • Eric McBride Oct 19, 2012 Link

    Agreed!

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  • Gio A. Oct 19, 2012 Link

    Nice points Eric, I don't know if you saw the article today on the verge that said that it'll probably be another 6 to 12 months before we see any real google inspired phones to come from motorola. It just takes that long to engineer a phone and get it to the market. So all we have been seeing from motorola recently is what they have been working on before google both them. So they might not be up to googles standards but its not googles fault. We just have to be patient for all the googerola goodnes to come in the next few months hopefully.

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  • Leon Wynn Oct 19, 2012 Link

    Best article on the Google QR

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  • Eric McBride Oct 19, 2012 Link

    @Gio - Thanks! And yeah, I saw that article, which makes perfect sense to me. Moto really needs a LOT of reshaping, and that will take time. Google has lots of work to do with Moto, and as you said, it's not their fault. That being said, im confident they WILL sort them out!


    @Leon - Thanks! Im glad you liked it :)

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  • Ibrahim Muhsin Oct 22, 2012 Link

    love the article, its impossible to understand why other people don't have simple common sense at times...

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  • Eric McBride Oct 22, 2012 Link

    @Ibrahim - Thanks bro. Glad you liked it :)

    And yeah..the lack of common sense these days also blows my mind.

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  • Patrick R. Oct 22, 2012 Link

    "a few weeks ago, their stocks hit their all time high"

    Anyone with just a bit of stock trading experience and as mentioned, common sense would take this as the key point of the article. Goog was at an all time high... stock traders and investors would naturally sell off their holdings to make a profit... wait for prices to drop a bit more and go back on a buying rampage and watch the stock prices rise and make a hell of a lot more moolah. Rinse and repeat.

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  • Eric McBride Oct 22, 2012 Link

    @Patrick -DAMMIT bro..I WISH I would have added exactly what you just said in my article. That hits the point home even more.

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  • Patrick R. Oct 23, 2012 Link

    @Eric, I do some stock investments here in the Phl so I am a bit familiar with movements of the market. If I were investing in Wall Street I would have dumped my goog shares and I'd be in a buy mode now. I would have easily added 10% (obviously less transaction feed) to my holdings without a cash outlay and by just making 2 or 3 phone calls (1 to sell my shares and the rest to buy).

    I can see how the pro apple camp may jump on news like a dip in share prices and predict doom for google when in fact it is a very natural market reaction. Remember there is a race to 1 Trillion USD in equity value which apple leads at the moment BUT google might just catch up depending on the iPhone vs Android OEMs, iOS5/6/7 vs Jelly Bean/Key Lime Pie performances both outside (sales) AND inside the court room. Bottom line though is profitability - in the end return on investment will determine it all.

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