Google shares slump 7.5% after posting 1Q results

Google shares fell 7.5% on Friday, as investors expressed disappointment in 1Q earnings that for most other companies would have been cause for celebration.
 
The company's stock price sank 45 cents to €409.82 on Friday, and continued their downward trend in after-hours trading.
 
The stock initially declined 4.9% on Thursday after the results were published, but rebounded on Friday morning.
 
Google on Thursday reported a 38% increase in 1Q in net profit to $1.96 billion, with revenue growing 23% to $6.77 billion.
 
But investors accustomed to blow-out results were disappointed in the figures, Reuters said.
 
Analysts also expressed concern that Google had been unable to substantially increase its revenue in areas other than online search.
 
Another possible reason for the market's negative reaction is Google's intention to increase spending in the year ahead, MarketWatch said
 
During its earnings call, Google said that it had hired 786 new employees during the quarter, that expenses rose to $4.3 billion from $3.6 billion in 1H09, and that it intended to ramp up M&A activity in the near future.
 
Analysts were split in their interpretation of the results, with some upgrading their forecast, and others cutting it. But nearly every broker covering the shares on Wall Street have price targets much higher than the current trading price.