Google shares tumble on bad search ad news

by Daniel Farey-Jones, Brand Republic 27-Feb-08, 09:00

LONDON - Google's share price is now 38% down from the all-time high of $747 it reached last July, after plunging yesterday on news that the number of clicks on its search advertising is down.

Internet measurement company ComScore said the number of clicks on Google ads by US consumers in January was down 0.3% year on year to 532m, and down 7% on December 2007.

The news sent Google's share price down 4.6% over the course of yesterday to $464, more than a third below its all-time high.

Since last July, the deteriorating US economy and specifically the company's disappointing fourth-quarter results have contributed to the slide. Revenues rose 52%, but analysts had expected the rise to be higher.

Google refused to comment on the ComScore report, while some observers warned against reading too much into the numbers, which do not reveal the price paid for each click.

Separate figures released by Nielsen Online yesterday show Google increased its share of the US search market from 56.3% in December to 56.9% in January.

Yahoo!'s share climbed from 17.7% to 19% and Microsoft's dropped from 13.8% to 12.1%.

Yahoo! rejected a $44.6bn (£23bn) takeover bid from Microsoft on February 11.