Tomahawk, WI 10/17/2014 (Basicsmedia) – Google Inc. (NASDAQ:GOOG) third-quarter earnings came short of analyst estimates as the company continues to invest on projects it believes will offset a decline of revenues on the advertising front. During an interview on CNBC, Enderle Group president, Rob Enderle, said that a drop in revenue was expected as expenses continue to increase at the back of Google employing more staff.
“The top-line weakness was something we hadn’t been anticipating least not this soon as they moved to mobile and as advertisers increasingly use analytics they are discovering the value. The people that are actually viewing the ads are not clicking through the ads. So the value they expect is not coming through and so they want to pay less for them, and the end result, of course, is Google Inc. (NASDAQ:GOOG) is getting less money,” said Mr. Enderle.
Google Inc. (NASDAQ:GOOG) is looking to tap into other fields for growth as advertisers continue to remain skeptical about the company’s advertising platform with a belief they are not getting enough value from the ads they pay for. The use of analytics is allowing advertisers to analyze the amount of traffic they are getting from posting ads on Google Inc. (NASDAQ:GOOG) in terms of customers.
Getting out of Google Inc. (NASDAQ:GOOG)’s stock at the moment would be premature according to Enderle, who advices on taking a back seat to see how things will play-out after the analysis of the third-quarter results. Google Inc. (NASDAQ:GOOG) is already entangled in a government probe that could considerably affect its operations in the long term according to the analyst.
“They are always going to have growth unless a government steps in and shuts them down, which is probably increasingly likely. They are under another trust probe remember when those happened to Microsoft Corporation (NASDAQ:MSFT) they were getting up to $1.2 billion a month penalties. Google Inc. (NASDAQ:GOOG) still has that in its future,” said Mr. Enderle.
Enderle expects Google Inc. (NASDAQ:GOOG) to struggle in terms of Growth going forward even though, revenue will continue to remain strong. The search engine giant posted earnings per share of $6.35 for the third quarter short of average estimates of $6.53.