WSJ Bearish On Google? If Only 60% Growth Is Bearish…

I’m seeing tons of references to a Wall Street Journal
article saying
Google’s earnings might slow, which seems related to Google’s stock also having
dropped by nearly $8 so
far today. If
so, that’s a lot of tumble for ONE analyst firm stating the obvious.

I’m pretty sure that Google itself has said that you can’t expect it to keep
skyrocketing in growth as it has been going forward. That’s sort of a natural
progression for any new business, so you’d think stating the obvious would be
clear to potential investors and shareholders.

However, the WSJ article doesn’t really focus on revenue growth off of products.
Instead, it spins around Thomson Financial noting that Google’s interest income
revenues aren’t likely to keep jumping up in quarter to quarter
comparisons. And that means?

Without the increase in interest income, Thomson noted, per-share earnings
growth [for third quarter 2006 compared to a year earlier] would have been
63.8% instead of the actual 78.8%.

Right — ONLY 64% growth from the previous year based off product revenue. That’s what people are
worried about? That triggers this type of quote?

"If you ‘X’ out [interest], their numbers are not as robust," said Mike
Thompson, director of research at Thomson Financial, which has issued reports
this year tracking interest income’s impact on Google’s earnings. "It’s … an
interesting dimension to the company that goes overlooked."

I’d say having 60 percent growth or more is pretty robust for anyone. The real
challenge seems to be whether product related revenue, which the article notes
makes up most of Google’s revenues, is going to continue growing at such a
strong rate in the future. The obvious answer seems to be not likely, that it
should see a natural adjustment as more of the potential market eventually comes
online or into programs.