Google Search Book - All you need to know about Google

Tuesday, February 28, 2006

Google Search Book : Google CFO Warns of Slow Growth

Google Chief Financial Officer George Reyes on Feb. 28 said advertising revenue growth is bound to slow, sparking a sell-off of as much as 13 percent in the Web search leader's volatile stock.

Reyes told an investor conference that Google's growth will depend on factors such as further audience gains, increased spending by advertisers or moves into new markets instead of counting on improvements the company makes in its Web search advertising business, which drives over 97 percent of sales.

"Most of what is left is just organic growth," Reyes said on a Webcast from the Merrill Lynch Internet Advertising conference in New York.

"Clearly our growth rates are slowing. We see that each and every quarter," he said. "We are going to have to find new ways to monetize the business."

Organic growth relies on factors such as overall Internet users or the number of Web search queries, instead of Google's own efforts to generate higher sales, like modifying its pay-per-click ad system to put more ads on search pages.

Google shares dropped as much 13 percent, or more than $50 in heavy trading, before recovering to close down $27.76 at around $362.62 on Nasdaq, a decline of 7.1 percent.

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