While Google’s 4th quarter profits jumped 17% and sales grew at 51%, the numbers were short of expectations. Google’s stock went down and questions are being raised about whether or not the search giant can weather a potential economic downturn.

Healthy business from advertising made up the cornerstone of Google’s growth, but analyists expected much more. For the year, Google’s revenue was $4.83 billion, up from $3.21 billion the year before.

“I don’t think Google’s ad model is insulated from a recession, but it is probably less vulnerable to cutbacks than other online ad models and definitely than traditional advertising,” said Scott Kessler of Standard & Poor’s.

Google did not fall short of expectations very much, however, but the shortfall of a few million dollars was enough to make the stock fall 8% in after hours trading. The stock is down about 20% this year, but the stock’s high of $747.24 last November was pretty extreme.

Another issue weighing on investors’ minds is Google’s promised bid of $4.6 billion for the C-block of wireless spectrum. There is a bid out there of $4.7 billion, and many expect it belongs to Verizon. If Google won the spectrum, it would have to spend a lot more money to build up the network.

This entry was posted on Thursday, January 31st, 2008 at 2:25 pmand is filed under Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.