SAN FRANCISCO (AP) -- Google Inc.'s stock price plunged below $400 Friday for the first time in two months as a brewing battle with the Bush administration compounded investor worries about the online search engine leader's upcoming fourth quarter earnings report.
The Mountain View, Calif.-based company's shares dropped $36.99, or 8.5 percent, to close at $399.46 on the Nasdaq Stock Market. That marked Google's lowest closing price since Nov. 16 and capped the stock's worst week since its ballyhooed initial public offering 17 months ago.
Google's market value has plummeted by 14 percent during the last week, wiping out $20 billion in shareholder wealth.
The selloff began Wednesday after Google's biggest rival, Yahoo Inc., released fourth-quarter earnings that fell below analysts' estimates.
Yahoo's shortfall raised concerns that Google's earnings report, due out Jan. 31, won't be as rosy as Wall Street anticipated earlier this month, when the company's shares surged as high as $475.11.
Wall Street's jitters intensified Friday as the market mulled the possible fallout from Google's rebuff of a Justice Department subpoena seeking a list of its users' search requests for a one-week period. U.S. Attorney General Alberto Gonzales filed a motion in San Jose federal court earlier this week seeking to force Google to hand over the requested information.
"Investors never like to see a company's name mentioned along side the term 'subpoena,'" UBS analyst Benjamin Schachter said.
Google is the only major search engine so far to challenge the Bush administration. Yahoo, Microsoft's MSN and American Online have all said they complied with the government's subpoena without providing personal information about their users.
The Justice Department issued the subpoenas last summer as part of its effort to restore an online child pornography law that has been blocked by the U.S. Supreme Court.
Although investors have initially punished Google's stock for taking on the government, Schachter and other analysts believe it could be a smart public relations move for the company.
If Google's refusal to hand over user information fosters even more loyalty on the Web and increase its market share, the company will have more opportunities to distribute its moneymaking ads.
By MICHAEL LIEDTKE AP Business Writer on Google's Stock Sinks on Worries About 4Q
© 2006 The Associated Press. All rights reserved.
The Mountain View, Calif.-based company's shares dropped $36.99, or 8.5 percent, to close at $399.46 on the Nasdaq Stock Market. That marked Google's lowest closing price since Nov. 16 and capped the stock's worst week since its ballyhooed initial public offering 17 months ago.
Google's market value has plummeted by 14 percent during the last week, wiping out $20 billion in shareholder wealth.
The selloff began Wednesday after Google's biggest rival, Yahoo Inc., released fourth-quarter earnings that fell below analysts' estimates.
Yahoo's shortfall raised concerns that Google's earnings report, due out Jan. 31, won't be as rosy as Wall Street anticipated earlier this month, when the company's shares surged as high as $475.11.
Wall Street's jitters intensified Friday as the market mulled the possible fallout from Google's rebuff of a Justice Department subpoena seeking a list of its users' search requests for a one-week period. U.S. Attorney General Alberto Gonzales filed a motion in San Jose federal court earlier this week seeking to force Google to hand over the requested information.
"Investors never like to see a company's name mentioned along side the term 'subpoena,'" UBS analyst Benjamin Schachter said.
Google is the only major search engine so far to challenge the Bush administration. Yahoo, Microsoft's MSN and American Online have all said they complied with the government's subpoena without providing personal information about their users.
The Justice Department issued the subpoenas last summer as part of its effort to restore an online child pornography law that has been blocked by the U.S. Supreme Court.
Although investors have initially punished Google's stock for taking on the government, Schachter and other analysts believe it could be a smart public relations move for the company.
If Google's refusal to hand over user information fosters even more loyalty on the Web and increase its market share, the company will have more opportunities to distribute its moneymaking ads.
By MICHAEL LIEDTKE AP Business Writer on Google's Stock Sinks on Worries About 4Q
© 2006 The Associated Press. All rights reserved.
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