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Thursday, July 14, 2011

Facebook Eroding Google Profits!

Facebook Eroding Google Profits!

"Google Inc. (GOOG)’s challenge to Facebook Inc. in social networking, an effort analysts said will cost more than $200 million, probably slowed second-quarter profit growth for the world’s largest Web search engine.
Profit excluding some costs rose to $7.85 a share in the period, Google will report later today, according to analysts surveyed by Bloomberg. Profit would have been higher if not for spending on Google+, a service unveiled by new Chief Executive Officer Larry Page last month to compete with Facebook, said Colin Gillis, an analyst at BGC Partners LP.
“Larry’s here, and he’s here to spend,” said Gillis, who estimates that Google spent about $100 million on the project, half the total, in the second quarter alone. “There are some large opportunities that they’re chasing after.”

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