Google reveals the secret of its stellar growth

Google has admitted that it will be unable to sustain the revenue growth of the past

Google's stock price fell by 7.1 per cent on Tuesday after the search firm's chief financial officer warned that Google will be unable to sustain the stellar revenue growth of the past. 

George Reyes explained at the Internet Advertising, Information and Education Conference hosted by Merrill Lynch in New York that Google's past growth had in part been the result of an 18-month project to optimise its online advertisement technology. 

Reyes also said that the company had reached the limits of its optimisation efforts. "Most of what is left is organic growth, which means you have to grow your traffic and you have to grow your monetisation," he said.

"Clearly our growth rates are slowing and you see that in each and every quarter and we're going to have to find other ways to monetise the business."

The optimisation project explains the steep financial growth that Google demonstrated after going public in the summer of 2004.

Reyes's remarks sent Google's stock price down by as much as 13 per cent. The shares recovered slightly later and closed the day 7.1 per cent lower at $362.62.

The comments come after Google failed to meet analyst expectations for its most recent financial quarter. The news sent Google stock down by 12.4 per cent at the time, representing about $16bn of its share-based market valuation.