Google and Microsoft earnings send jitters through market

 

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By Barry Collins

Posted on 18 Jul 2008 at 11:21

Google and Microsoft have sent jitters through the stock market despite both posting healthy profit increases.

Google's net income jumped by more than a third in the second quarter to $1.25 billion. But that wasn't enough to prevent the company's stock from sliding by around 10%, because the profits were slightly lower than analysts' expectations.

"Strong international growth as well as sustained traffic increases on Google's web properties propelled us to another strong quarter, despite a more challenging economic environment," says Google CEO, Eric Schmidt.

Confidence in Google's business was dented by the slowing number of paid clicks, which were down 1% on the previous quarter, although still up by nearly a fifth over the same period last year.

About 14% of Google's revenue came from the UK in Q2, with revenues totalling $774 million from this country.

$60 billion year

Meanwhile, Microsoft's yearly income of more than $60 billion failed to impress investors either, as the company slightly lowered its forecasts for 2009.

Microsoft remains confident it will ride out the worst of the economic downturn, but admits that the market is tough. "Delivering $60 billion in annual revenue is an outstanding accomplishment and a testament to the powerful combination of great technology solutions and strong execution by our partners and global sales and marketing teams," claims Kevin Turner, chief operating officer at Microsoft.

"The outlook for fiscal year 2009 is positive given the breadth of our impressive technology portfolio and the expanding collection of online services we are bringing to market."