Ad revenue worries knock Google

Fears a slowing US economy may be hitting Google have led analysts to cut the share price target for the firm.

Google shares fell sharply after analysts reduced price targets

The move came after research firm Comscore reported a sluggish January in the viewing of paid-for-advertisements on the Google site.


The total clicking on to Google's paid adverts was 532 million, down from 533 million a year before, Comscore said.

UBS cut its price target from $650 to $590, and BMO from $690 to $590. Google shares fell 4.57% to $464 on Tuesday.

Its shares reached a peak of $747.24 in early November 2007 and were just below $700 as 2008 began.

However, now it appears that shares in Google may be getting dragged down by the sluggish US economy.


Wider worries
Although there was strong growth in searches on Google's US website in January, there was a decline in the number of people clicking on through to the paid-for advertisements which create the bulk of Google revenues.

UBS analyst Benjamin Schachter also warned that international growth, including the UK, Google's second-largest market, was a concern.

There had first been signs of a slowdown at Google after it reported disappointing profits at the end of January.

Google's profits were up 17% to $1.21bn (£608m) for the three months to the end of December, but some analysts had been hoping for stronger growth.