So, Google didn't make as much money as people were expecting...
The big news of the last 24 hours is that Google, the search/advertising/mobile/computer Goliath mistakenly released their financial results early. This, coupled with the fact that they didn't make as much profit as the "markets" were expecting, saw the Google share price drop by around 9% before trading was suspended. There have been been various comments in the media ranging from indifference to some claiming that the results are disasterous. The truth is somewhere in between.
To get some perspective, Google have got around £28 BILLION available to spend right now so they're nowhere near insolvency! And while profits WERE down, we're talking about a 20% dip - they're still massively profitable and their bank balance increased by £1.3 billion during the period in question on the back of revenues that were 45% UP.
So why were profits down? a few reasons, but probably the biggest was the company's purchase of Motorola which will set the tech giant back around £7.9 billion in all. More than enough to account for any downturn in profits. So really, was this dip any kind of surprise? Not really. The markets are a fickle thing; basing company valuations on guesswork, supposition and rumour rather than any sort of reality and when you see a 9% drop in share prices on a company that made massive amounts of profit there has to be some sort of sense check in place. Once trading re-opened the share price did recover a little and is currently just 0.57% down today.
The media are so keen to see successful companies and people trip up and we see all sorts of headlines that push the scare rather than the story. This is really what has happened here.