Soon after Google shares dropped nearly 10 % over the course of two days, wiping out more than $24 billion from the company’s value, analysts have started predicting whether the world’s leading internet search engine could be nearing an end soon.
Eric Jackson, the founder and managing member of Ironfire Capital, apprehends that Google could disappear in five to eight years. He says that what he means by ‘disappear’ is in the sense that Yahoo used to be the king of search and for all intents and purposes, Yahoo has disappeared.
According to knowledgeable sources, the profit & losses are driven by a decline in advertising revenue, which on a click-per-click basis fell 15 percent.
And advertising revenues are falling, which would continue to fall for internet companies because consumers are increasingly migrating to mobile applications and advertisers aren’t willing to pay as much for a mobile ad, the paper said.
It is observed that the main reason for Google’s fall in profits is its $12.5 billion purchase of Motorola, the struggling cellphone manufacturer, the division that lost more than 500 million dollars over the quarter, prompting aggressive cost-cutting measures.
However, the web giant is also suffering in its core business, search-related advertising, as the income received for every ad clicked on fell by 15 per cent in just three months, it added.