Google's valuation in the stock market dropped by about $5.9bn today, its stock slipping 4.71 per cent to $403.54.
Investors dropped the stock after data was released indicating that retail sales in the past weekend were less bullish than hoped. Fewer retail sales could indicate a weaker economy, leading to a slowdown in advertising sales on Google's web pages (including its Froogle price comparison service).
Nearly $6bn might be a bit of an overreaction, but apparently some investors are finally starting to see that Google isn't in the business of printing money but instead will grow over time. This justifies valuations that are more in line with other normal businesses where the laws of supply, demand and competition apply.
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Photo: myles davidson
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