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Microsoft and Google Profits Fall but What Does It Mean For Search?

Microsoft has announced a fall in profits of 22%, with the release of their quarterly profits, while Google presented third quarter results down 20% from the year before.

But the drama didn’t stop there.

Google shares were suspended for two and a half hours after the internet giant released its third quarter results early by mistake. Profits dropped more than analysts expected but the search giant blamed printing firm PR Donnelley for filing an early draft of the results.

Shares had already fallen 9% when the suspension took effect; and was down 8% at the end of the day after trading had resumed.

Google Chief Exec Larry Page addressed financial analysts via a close of play conference call and insisted that Google had had a strong quarter. The slide did, however, take Google share price back below that of competitor Microsoft; but it wasn’t all good news for the makers of Bing either.

Microsoft net profit fell from $5.74 billion to $4.47 billion in the three months to September and total revenue fell 8% to $16 billion. The tech behemoth deferred some revenue due to the forthcoming releases of Windows 8 and the new Microsoft Office, and the company is expected to regain this revenue in the following quarter.

After extended trading Microsoft shares fell 3%.

So, with both Microsoft and Google seeing profits drop, what does the future hold for search? Is a shift in power beginning to emerge?

HitSearch Director Andrew Redfern commented "Google’s figures have been largely skewed by the performance issues of Motorola and how the large capital outlay is not trigger the required revenue run rates. Mobile search is growing at an remarkable rate however revenue generated are not following suit in the short space of time, however I fully expect Google to claw back the losses over the medium to longer term. The issues for the search industry is - are we likely to see CPC increases to fund the Motorola integration. Only time will tell what Google’s reaction will be."


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