Google 1Q Profits Jump 30%
Apr 17th, 2008 by Shaun Carter
Google was beaten down lately because of reports about decreased click through rates and the effect it would have on earnings. But, what many failed to realize is that in the short term earnings may fall - but in the long term the economics will even out and earnings per click will increase to compensate for better targeted traffic.
I have noticed the effect of the decreased click area of Adsense ads on my websites, but my overall earnings have increased with time. If anything will perk Google stock back up, it’s the realization the the slumping economy is not affecting earnings and the decreased click area is helping Google attract more advertisers at a more attractive CPC.
I have been accumulating at levels below 500 per share and doubt that Google will see anything in that range again as long as earnings continue to climb. Any potential advertising agreement with Yahoo should also significantly impact earnings to the upside. I expect an announcement of a formalized agreement from Yahoo within 30-60 days.
I will continue adding to my position on any weakness around the 500 per share price range.
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