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Google shares plunge after 'fat-finger' fiasco

It may be one of the world's great hi-tech companies but Google shares plunged after a "fat finger" computer mistake led to the premature release of hugely disappointing results for the company.

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It may be one of the world's great hi-tech companies but Google shares plunged on Thursday after a "fat finger" computer mistake led to the premature release of hugely disappointing results for the company.

The web search giant's stocks crashed by as much as 11pc and wiped more than $22bn (pounds 13.7bn) from the value of the company after the inadvertently published figures revealed a 20pc fall in profits.

The announcement was scheduled for publication after markets closed in New York, but they were accidentally published four hours early.

The release even contained a space for a quote from Google's chief executive, Larry Page.

The mistake sent Google's share price plummeting - before their trading was suspended, more than 9pc down at $687.30 - amid fears that the stock would crash.

Google rushed out a statement shortly after the results, saying that its financial printer, RR Donelly, had filed an early draft of the company's results without authorisation. "We have ceased trading on Nasdaq while we work to finalise the document. Once it's finalised, we will release our earnings, resume trading on Nasdaq and hold our earnings call as normal," it said.

The company, which earlier this month surpassed Microsoft in terms of value, saw its third-quarter profits slide because of spiralling costs and a decline in advertising prices.

It delivered revenues of $11.3bn in the third quarter, but these fell short of analyst estimates of $11.8bn, while profits tumbled to $2.18bn, down a fifth on the $2.73bn it made in the third quarter last year.

Google's filings with America's Securities & Exchange Commission revealed a worrying drop in the amount of money the technology giant receives for each advert users click on its websites.

Its average income per click fell 15pc over the three months to the end of September, sparking fears that it is losing traction with advertisers and failing to monetise internet usage on mobiles as efficiently as it has done on traditional personal computers.

Motorola Mobility, the mobile manufacturer acquired by Google, accounted for 18pc of Google's revenues, or $2.58bn.

Google also revealed in the filings that it plans to make significant capital expenditures, reviving concerns over the amount of money it is spending on expanding its operation and hiring staff around the world. The company's total costs shot up by 71%, despite commitments to cut staff in some of its divisions.

Analysts were alarmed by the amount the business had declined. "The core business seems to have slowed down pretty significantly, which is shocking," said Sameet Sinha at B Riley. She said the shift could be driven by a drop in Google's popularity as a search engine, as people start searching more through apps.

"The big fear has always been, what if people decide just to go straight to Amazon and do their searches? And potentially that's what could be happening."

 

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