While Google prepares to release its first-quarter results this week investors express their concern about the company’s possible revenue declines. The anxiety of the public is incited by the recent rounds of layoffs undertaken by the Internet search giant in a move to cut its costs.
"Whenever Internet companies cut costs, people take any cost cutting as a really negative signal," said Sanford Bernstein analyst Jeff Lindsay.
According to Lindsay actually there are no reasons for concerns as Web searches on Google continue to increase with the revenue generated through the paid clicks still keeping upper levels.
"We think they've been cutting costs prudently and sensibly, and it's probably a good indication that they're going to have good margin performance," said Lindsay, who rates Google's stock "outperform."
Meantime the global recession goes on affecting many industries around the world with the online advertising spending forecasted to decrease by 5% in the U.S. this year. Analysts expect Google to post a sequential drop in revenue that is for the first time since the tech giant went public. First quarter revenue is forecasted to stand for $5.53 billion, a 3 percent fall quarter over quarter, or a 6.6 percent gain year on year.
If compared with its rivals Google appears relatively successful and profitable as long as Yahoo, for instance, projected its sales to fall as much as 16% on a year-over-year basis in the first quarter while some economists expect Time Warner's AOL unit to slide 19% or even more.
Post new comment