Google’s increasing expenses are affecting its earnings and stock prices. Its remuneration to its employees is moving at a faster pace from past four years, but revenues are comparatively far less.
As per the second quarter results declared by Google on Thursday, there has been a rise of 24% in both its net income and revenues, but that’s not satisfactory for its investors as the Company didn’t achieve the figure projected by analysts.
The falling revenues have left Google with lower income and, thus, affected its stock price, which has witnessed a plunge.
The share prices of Google climbed down by 4% or $19.52 and the stock prices closed at $494.02 after the second quarter results were announced.
The reasons are apparent. Google is making huge expenses in order to keep advancing on internet and diversifying itself into a number of segments such as online video, mobile devices and computer operating systems. In order to proceed with its ambitions, 1200 new people were hired in the second quarter and 21,800 more workers were added.
European debt crisis is also another cause for Google’s falling earnings as one-third of the company's revenue comes from Europe.
In order to explore more opportunities, new engineers and workers are expected to be employed by Google in the coming months.