Tuesday, February 05, 2008

Google struggles with Online networks

In 2007 Google made $4.2 billion of benefits. However, despite this great result, the Mountain View firm deceived analysts.

Indeed, as web 2.0 and online communities are thrilling investors and specialists, Google seems to struggle with Myspace, while Miicrosoft has partnered with Facebook with success.
Google established a partnership with Myspace to provide Adsense on the platform. That is the reason why Google's stock price has fallen at $564, whereas it reached $747 in November.

Google seems to have reached its growth limit, and has problem to find new strategies to grow its (already large) revenues.
However, the competitor Microsoft has encountered success with Facebook. Microsoft responsible of the partnership with Facebook John Tinter explains: "Google has tries to apply its Adsense system to myspace without adaptation, whereas Microsoft has tested different techniques of ads, including the ones which appear in contextual blocs, or banners for example".

Does Google has to change its business plan? Maybe Google had made errors while partnering with Myspace, as they did not think about the specificities of social communities. But it doesn't mean Google is weaker than couple of months ago.

I personally believe that the Yahoo problems and Google's issues to keep its fast pace growth turns stock prices down because of the high speculation that occured so far on these stocks. As I have said for Yahoo, which is even more true with Google, these companies are still profitable, but the fact is that their stock price were based on their skill to grow faster than any other industries, which is maybe not true anymore.

I think these falls of stock prices will only contribute to a better evaluation of the stock value, and then get rid of the speculation buzz of these companies.

Blogged with Flock

No comments:

Post a Comment