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Google Shares Fall on Weaker than Forecast Earnings

Larry Page and other Google executives may have their hands full in the coming weeks, as the company's chief executive officer will have to perform damage control to combat both a logistical blunder and a less-than-desirable earnings report.

The earnings report was released early on October 18, according to The New York Times, a move that sent its stock price plummeting and made investors wary of developments regarding its mobile advertising revenue.

Officials from Google noted that the company was scheduled to release the earnings after trading closed, but a financial publisher's error led to it being filed much earlier than anticipated. After the mistake was made, the stock price immediately plummeted by more than 9 percent.

Market experts had forecast a slight drop for the company, but the report was especially disappointing due to the decreased price that advertisers were paying per click for smartphones and other mobile devices.

According to the newspaper, the company is struggling to find ways to increase ad revenue from mobile devices, and Google's recent acquisition of Motorola Mobility - the ailing cellphone producer is struggling and losing money - did not help bolster its stock.

"All of these mobile devices are generating clicks that are just less valuable to advertisers," Colin Gillis, an analyst at BGC Partners, told the Times, noting that mobile ad clicks cost half of what those on desktop Web ads went for. "The supply part is doing so well, but the supply’s going to continue and continue to grow and they could devalue their inventory." 

CEO attempts to control damage

PC World reported that Page tried to put a positive spin on the company's poor third quarter results, as he spoke to Google's efforts to try and strengthen its mobile advertising department to support future growth.

"As we transition from one screen to multiscreens, Google has enormous opportunities to innovate and drive ever higher monetization," Page noted, speaking to the popularity of smartphones and tablets.

Page also spoke to the increased potential of company assets like its Play store, where mobile users purchase applications and related media. According to the news outlet, the CEO also tried to downplay the mistake by RR Donnelly, the printing service provider for Google.

"I am sorry for the scramble earlier today," Page told Wall Street analysts after the market closed. "As our printer said, they hit send on the release just a bit early."

TIME Magazine reported that the 20 percent decline in the company's third quarter profit may have been briefly overshadowed by the early release of earnings, but Page enacted several damage control strategies immediately after investors got wind of the drop.

The executive spoke to the fact that Google's quarterly revenue has increased by a significant margin, downplaying the volatility that can come with financial reports during times of expansion. Regardless of the strategy employed by Page, $20 billion in market value was lost in under 20 minutes after the release, according to the news provider.