Netco's shares drop 12%
Search giant and Wall Street darling Google lost a bit of its luster Tuesday as its shares plunged 12% in after-hours trading following an earnings report that disappointed investors.Revenue and net income both shot up 82% in the fourth quarter to $1.9 billion and $372 million, respectively. Netco missed profit expectations, however, due primarily to expense accounting that resulted in a higher-than-expected effective tax rate. Investors have learned to expect extremely high earnings growth from Google each quarter thanks to the company’s phenomenal track record thus far. Of Google’s revenue in the quarter ended Dec. 31, 57% came from its own site, while 42% was from advertising on partners that host Google ads. Overseas revenue accounted for 38% of its total. For all of 2005, revenue was up 93% at $6.1 billion, while net income more than tripled to $1.47 billion. A New York Post report that Google held talks to acquire struggling online musicstore Napster sent latter company’s stock up 25% Tuesday, even though Google denied the report and has thus far not made any moves into the music space. After closing up 1%, Google shares were down 12% at $381.70 in after-hours trading following the earnings announcement.