What goes up. . . Perhaps it isn’t a sign of the apocalypse, but shares of mighty Google tumbled more than 7 percent in early trading today before closing down 4.57 percent, adding to a decline that has dramatically reduced its market value in less than four months.
Google closed at $464.19 – quite a contrast to its bubblicious peak of $747.24 on intraday trading on Nov. 7.
Why is the world’s top search engine sputtering? It is basically an advertising behemoth, and as consumer confidence and spending declines, so too does the number of ad click-throughs, analysts suggest. Meanwhile, Google has also been fine-tuning its ad programs, which it says should contribute to short-term decrease in ad action. Paid ad views in January dropped 7 percent from a month earlier, according to a comScore report, which prompted several analysts to downgrade the stock. The decline came even as Google’s total searches jumped 39 percent from a year earlier.
Plus, momentum trading works both ways. Wall Street has had a habit lately of turning recession fears into sharp declines in such erstwhile high-flyers as Apple and VMware. Maybe it’s Google’s turn.
The Next Big Thing? Suddenly, Treasury notes are hot. As foreclosures rise, credit gets crunchier and Wall Street swoons, investors are moving toward the relative safety of U.S. government debt.
Investments in Treasury notes rose after an economic report showed U.S. consumer confidence fell this month to the lowest level in five years, increasing demand for the relative safety of U.S. government debt.
A private survey showed earlier that home prices in 20 U.S. metropolitan areas decreased sharply in December. Nationwide, home prices fell 8.9 percent in the fourth quarter from a year earlier, the biggest decline in 20 years of record keeping.
Travelers beware: Checking in a second piece of luggage might cost travelers as much as the luggage itself on US Air. The airline said today it will charge fliers $50 round-trip for checking a second bag starting May 5, citing rising fuel costs as a reason for raising revenue.
The fee applies to all advance tickets purchased as of Feb. 26 for May 5 flights and beyond. US Air’s move follows that of United Airlines, which earlier this month said it will begin charging $50 for a second bag, also beginning May 5. So far, those are the only carriers to announce checked-bag fees.
US Airways said that only 8 percent of its customers check more than one bag. It expects the fees to generate about $75 million in revenue and cost savings each year. “The main reason we did this was to mitigate costs,” spokeswoman Valerie Wunder said. “With fuel at $100 a barrel, we needed to realize that reality and do something other than just raise fares.”
I want MySQL: Calling it “the crown jewel” of potential open-source software acquisition, Sun Microsystems Chief Executive Jonathan Schwartz announced completion of its acquisition of MySQL in a $1 billion deal.
Sun touts it as a dramatic upgrade in creating an open-source software platform that represents a full alternative to Microsoft’s proprietary technologies. “We will be able to accelerate the road map,” said former MySQL CEO Marten Mickos, who was named senior vice president of Sun’s newly formed Database Group within Sun’s Software Division.
MySQL, based in Sweden and Silicon Valley, has about 400 employees. Customers can now have “peace of mind” in deploying MySQL to “mission critical” uses, Schwartz said, because it will be now backed by Sun’s 17,000-member global sales and support network.
Silicon Valley tech stocks:
Up: Adobe, Applied Materials, Cisco, Electronic Arts, Hewlett-Packard, Intel, Oracle, Yahoo. Down: Apple, Google, Genentech, eBay, Sun Microsystems
The tech-heavy Nasdaq composite index: Up 17.51 points or 0.75 percent, closing at 2,344.99
The blue-chip Dow Jones industrial average: Up 114.7 points or 0.91 percent, closing at 12,684.92
And the Standard & Poor’s 500 index: Up 9.49 points or 0.75 percent, closing at 1,381.29
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, the Associated Press, Bloomberg News and other wire services.
