Google unveils the secret to its past stellar financial growth

Google unveils the secret to its past stellar financial growth


Investors send stock plummeting down as the search engine explains why the boom days are over.

Google's stock price fell by 7.1 per cent on Tuesday after the search engine's chief financial officer warned that the company will be unable to continue the stellar revenue growth of the past.

At the Internet Advertising, Information and Educations Conference that was hosted by Merrill Lynch in New York, Google CFO George Reyes explained that the company's past growth had in part been the result of an 18 month project to optimize its online advertisement technology. He also said that he believed that the company had reached the limits of its optimization efforts.

"Most of what is left is organic growth," Reyes said. "Which means you have to grow your traffic and you have to grow your monetization. Clearly our growth rates are slowing and you see that in each and every quarter and we're going to have to find other ways to monetize the business."

The optimization project explains the steep financial growth that Google demonstrated after the company went public in the summer of 2004.

The remarks initially sent Google's stock prices down by as much as 13 per cent. The shares later slightly recovered and closed the day 7.1 per cent lower at $362.62.

The news comes after Google failed to meet analyst expectations in it's most recent financial quarter. The news at the time sent down Google stock by 12.4 per cent, losing about 16bn of its share-based market valuation.