Google nosedives after disappointing quarter

Google is now valued at $127.87bn

Google lost about $16bn of its share-based market valuation yesterday after publishing an earnings announcement showing that it failed to meet expectations for the last quarter of 2005.

The search firm's reported net income nearly doubled from the previous year to $372.2m on revenues of $1.9bn. But investors had been hoping for more.

The earnings announcement kicked off a selling spree, and Google's shares plummeted by 12.4 per cent in after-hours trading.

Google's shares have been on a steady rise since the company went public in August 2004. Shares were introduced at $85 and were trading at $432.66 prior to Tuesday's earnings release, valuing the company at $127.87bn.

By comparison, Microsoft is valued at $299.65bn, Ford Motor Company at $84.6bn and Yahoo at $48.77bn.

Google's stock initially fell by as much as 19 per cent following the announcement, but showed a slight recovery later.