DailyTech - Facebook Hires Important Google Executive

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Shane McGlaun (Blog) - March 5, 2008 9:20 AM

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4 comment(s) - last by spluurfg.. on Mar 8 at 1:50 PM

Google executive leaves causing stock price to drop to lowest point in a year

Google is the company to beat when it comes to internet search and online ad sales. The company has seen stock prices as high as $600 per share since the company went public.

News of one of Google’s most important executives leaving led to Google seeing its lowest stock prices of the year as shares fell as low as $435.78 in heavy trading according to Reuters. The executive that caused this drop is stock price is Sheryl Sandberg, who is reported to be the main executive responsible for Google’s advertising programs that account for the vast majority of Google’s financial gains.

Reuters quotes RBC Capital analyst Jordan Rohan saying, “Sandberg's departure is a significant loss for Google. It signals that the company has reached a level of scale and bureaucracy with which some early Google employees are uncomfortable."

Google’s top three executives, Sergey Brin, Larry Page, and Eric Schmidt are probably wishing they had included Sandberg in their 20-year pledge. Google’s loss is Facebook’s gain as Facebook announced it had snagged Sandberg to act as its new chief operations officer. Sandberg’s departure makes the first executive to leave Google since its IPO in 2004.

Sandeep Aggarwal, an analyst at Oppenheimer, told Reuters, “It is a significant move [Sandberg leaving]. This could be the start of others leaving.” Sandberg will manage sales, marketing, business development, human resources, public policy, privacy issues and communications for Facebook.

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MySpace, Facebook etc. = blah

By MrBlastman on 3/7/2008 9:05:09 AM , Rating: 2

Am I just the only one that would be more than happy if MySpace, Facebook and other similar sites just ceased to exist? :(

Back OT - Google has been getting beat up for quite a while. It is very likely they grew too fast and key talent like this - where the money stream is concerned, might prove to be a painful loss.

It is difficult to judge though considering how convoluted Googles income stream really is though. It isn't exactly straightforward most of the time.

The thing I fear the most, regardless of share price, is Google slowing down on the innovation side. That would truely be tragic for all of us.

RE: MySpace, Facebook etc. = blah

By ksuWildcat on 3/7/2008 1:00:27 PM , Rating: 2

quote:
Am I just the only one that would be more than happy if MySpace, Facebook and other similar sites just ceased to exist? :(

Nope. It wouldn't bother me any if Facebook or the others went under.

Google is still well-positioned for long-term financial growth, assuming that the market for online ads continue to grow as expected over the next several years.

Also, didn't Google almost reach $750/share at some point last year? Perhaps I'm wrong, I honestly cannot remember. OK, a quick check online shows a 52 week high of $747.

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RE: MySpace, Facebook etc. = blah

By Master Kenobi

(blog) on 3/7/2008 2:46:27 PM , Rating: 2

Google's stock price is largely a comedy act since the company does well and has only a small amount of stock available in the market, the price is extremely high. It doesn't really reflect much except the high demand on the stock. Now that google has reached critical mass, it is going to be subject to the problems that plague most other companies. I would not expect google to roll along by leaps and bounds anymore, instead they will grow slowly like most well developed companies in the industry.

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RE: MySpace, Facebook etc. = blah

By spluurfg on 3/8/2008 1:50:05 PM , Rating: 2

Typically, a stock's price should reflect the dividend and the expectation of the future dividend. As such, it is often tied to the earnings -- typically, price/earnings ratios range from 15-18 for large corporations. Google's P/E ratio is 32x, indicating that investors expect earnings to increase significantly going forward. Considering they've experienced EBITDA growth of over 50%, that might not be a silly bet, but of course previous performance is no guarantee of the future. If for whatever reason their growth stopped, there would be no reason for their share price to remain at the current pricing.

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