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Google shares fall: is the fairy tale over?

Trend in Google's share price from 2 April 08 Google's stock price has fallen 38% from its peak last year. And, for the first time ever, the number of clicks on the California-based company's cash cow, Google Ads, have stopped climbing in the US. For some financial analysts, alarm bells are ringing.

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Trend in Google's share price from 2 April 08

Google's stock price has fallen 38% from its peak last year. And, for the first time ever, the number of clicks on the California-based company's cash cow, Google Ads, have stopped climbing in the US. For some financial analysts, alarm bells are ringing.

"Google is not transparent at all"

Benoît Flamant is the chief executive of IT Asset Management, which specialises in technology shares:

"Google has really taken a tumble in the stock market. We also sold our shares at the start of the term. The fundamentals of the company haven't changed, and it appears to be fine to us. But there's a lot of concern about the company on the market.

Firstly, they made a number of big investments of which we're yet to see the benefits. For example, they bought YouTube for 1.65 billion dollars, but we haven't heard anything about the company's turnover. And I get the feeling it's because there isn't anything to hear.

Google is not transparent at all when it comes to its internal organisation and results. It provides very little data to financial analysts. And they didn't mind as long as its shares kept climbing. But if they continue to fall, people will expect more transparency and respect for the market rules. Google is one of the few companies that don't provide revenue forecasts. It's true that these types of forecasts are always hazardous, but they're also important for analysts, who can't simply invest in a myth.

Finally, Microsoft has decided to kill off Google. The American giant is worried about its own survival. It noticed Google's attack on the office software front, which is one of Microsoft's major sources of revenue. We know that Microsoft never gives up, even in sectors like the internet, where its results are not great. And it's a company with a turnover almost five times that of Google. It's not good to have that kind of enemy.

In my opinion, Google is still a solid and inventive enterprise. But if the market loses trust, it might find itself in difficulty."

"Now we have systems monitoring returns on Google Ads"

Hussein Sarhdaoui is the director of "Re-mind", a media agency specialised in the internet and particularly Google Ads:

Google Ads is a very new system. It only really took off in 2006. Advertisers spent time adapting themselves and mastering the tool. At the beginning, they all wanted to be the best placed in terms of key words. And because it worked through bids, they found themselves paying too much. It wasn't profitable. Now we have systems monitoring returns on Google Ads, so advertisers can check if they're paying a good price for a keyword.

I think Google might be ready to sell off some of its services soon. But in exchange, it collects mountains of data from its clients; both advertisers and web-users. The company knows that in the long run it's going to win. Media agencies like us, but also advertisers, will be dependent on Google for the mine of information at its disposal."