RealTime IT News

Investors Get Googled

Investors can add a new term to their lexicon: getting Googled.

In the 8 1/2 trading hours since Google announced plans to go public, the Nasdaq has fallen 53 points, or 2.7%, closing below its 200-day moving average on Friday for the first time since March 2003.

The sell-off appears to have much to do with the competitive threat that Google represents. Yahoo , for one, fell 7.6% Friday on concern that Google's strong financials represent a competitive threat for Yahoo. Google also announced in its SEC filing that it plans to terminate its agreement with Yahoo, which accounts for less than 3% of Google's revenues.

There were also fears that investors might swap shares of Yahoo for Google, echoing larger concerns about the market's ability to absorb a $2.7 billion IPO amid all the other new issues and insider sales coming to market.

Another worry is that Google's high payout rate to partner sites could pressure margins throughout the industry. Google said in its filing that it expects margins to come down.

Ask Jeeves and Looksmart were among the other advertising-backed companies taking a hit on Friday.

So far, it doesn't look much like August 1995, when Netscape led the way to a brave new world for internet investors. But that's not necessarily a bad thing. Profitability and rigorous fundamental analysis were elements that were sorely lacking in the roaring '90s. It's good to see them back.

The Nasdaq fell 38 to 1950, the S&P 500 lost 6 to 1107, and the Dow dropped 46 to 10,225. Volume declined to 1.64 billion shares on the NYSE, and 2.18 billion on the Nasdaq. Decliners led 19-13 on the NYSE, and 22-9 on the Nasdaq. Downside volume was 71% on the NYSE, and 85% on the Nasdaq. New highs-new lows were 29-127 on the NYSE, and 44-82 on the Nasdaq.

Gateway tumbled 9% after missing estimates, warning, and announcing more layoffs.

Netease , Business Objects , Critical Path , Brightpoint , Genesis Microchip and Foundry all fell on their results. Newport was one of the few reporting companies to buck the trend.

Symantec lost 5% after settling a patent dispute.

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