Internet search company Google is set for a rough stock market ride
on Wednesday after its 82% surge in profit failed to meet Wall Street's
forecasts.
A little rain may be about to fall on Google's parade
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Net income in the last three months of 2005 rose to
$372.2m (£209m) from $204.10m a year earlier, lifted by a strong demand
for online advertising.
That works out at $1.22 per share, well below the $1.50 expected by analysts.
The results will fuel concerns that Google's shares are overvalued and the stock tumbled in after hours trading.
'Going to be hurt'
Google dropped 14% in extended electronic trading in New York, and at one point were trading almost 20% lower.
"They missed. Revenues are in line, but it was a big
earnings miss," said Tim Ghriskey, chief investment officer at Solaris
Asset Management.
"This is a competitive market. When a company selling at
this valuation misses earnings to the degree it missed here, the stock
is really going to be hurt."
Google said sales revenue grew 86% to $1.92bn as new
features including its e-mail service Gmail helped it attract internet
users.
Search engine rival Yahoo! also disappointed markets with its earnings report a couple of weeks earlier.
No plans
Earlier in the day, Google denied it had plans to buy music download company Napster.
A report in the New York Post claimed that Google was mulling plans to work with Napster to offer music downloads.
There already had been speculation that the company may be interested in moving into the music business.
The news pushed Napster shares to record levels. | 
