Google stock drops 4 percent as advertisement rates fall again
By Alexei Oreskovic
(Reuters) - Google Inc shares tumbled 4 percent on Friday as Wall Street ignored the Internet search giant's plans to split its stock and focused on a decline in advertising rates and other worrisome business trends.
Google's search advertising rates declined more sharply than expected during the first quarter and the company increased payouts to partners.
This deepened concerns about Google's growth prospects among investors already nervous about its planned $12.5 billion acquisition of smartphone maker Motorola Mobility Inc.
First-quarter profit beat Wall Street expectations, but analysts noted that Google was helped by a lower tax rate.
More than three times the average volume of Google shares traded hands on Friday, as Google's stock finished the regular session down 4 percent at $624.60.
Google's plans to split its stock and to create a special class of non-voting shares drew some criticism from corporate governance advocates. But given that the move merely perpetuated a two-tier system that has long given Google's founders majority control of the company, investors seemed to shrug off the news.
"It's not inconsistent with how Google been run in the past," said ITG Investment Research analyst Steve Weinstein. "You, as a public investor, are just along for the ride."
The world's top Web search engine attributed the 12 percent drop in its cost per click (CPC) for the first quarter to a shift to cheaper mobile advertising rates among other factors. Continued...