San Francisco – Google Inc. stock dropped 4.7 percent Monday, accelerating a recent shift in sentiment that has caused once-ebullient investors to become more circumspect about the online search-engine leader.
Barron’s cast the latest pall on Google with an article outlining several risks that threaten to squeeze the company’s profit margins and cut its market value in half.
The gloomy scenario further dampened investors’ enthusiasm for Google, whose market value has plunged by 27 percent during the past month to wipe out nearly $40 billion in shareholder wealth.
Google’s shares fell $16.91 to close at $345.70 on the Nasdaq Stock Market. The shares peaked at $475.11 on Jan. 11.
Since its stock reached that high, Google has released a fourth-quarter earnings report that didn’t live up to analysts’ lofty expectations and alienated some of its users by launching a censored version of its search engine in China to adhere to that country’s government restrictions on free speech.
Those developments have contributed to an abrupt change in perception about Mountain View-based Google, which began 2006 as a widely revered Internet icon that seemingly could do no wrong as its shares soared from their August 2004 initial public offering price of $85.
Now, Google is increasingly viewed as a company vulnerable to stiffer competition as well as its heavy reliance on advertising-revenue growth that could taper off as companies become more sophisticated about online marketing.
