The Five Dumbest Things on Wall Street This Week

                                                                

Google Search: Sell Result: Eric Schmidt

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1. Monetary Policy

This week, the insiders weren't the only ones selling Google (GOOG) stock.

The world's most hyped-up search engine spurred a brief selling panic late Tuesday with a fourth-quarter earnings shortfall. Blaming an unforeseen rise in its tax rate, Google posted an adjusted profit of $1.54 a share, 22 cents shy of the Wall Street consensus estimate. The stock plunged as much as 17% late Tuesday before recovering Wednesday to end just 7% lower.

Predictably enough, bulls on Google -- which even at reduced levels has more than quadrupled since its August 2004 initial public offering -- soon were out in full throat.

"We continue to believe Google is gaining significant market share of global search queries," wrote JMP Securities analyst William Morrison, who reiterated his strong buy rating while cutting his target price by $25 to $550. "The global search opportunity is no smaller than it was yesterday."

Also no smaller was the stack of sell orders being furiously filled out by Google execs. CEO Eric Schmidt sold $24 million worth of stock Monday under a preplanned selling program, according to regulatory filings.

The selling frenzy is nothing new. According to The Associated Press, Schmidt reaped $345 million in stock sale proceeds in the first 11 months of 2005 alone.

He and 13 other insiders pocketed a total of $4.3 billion in stock sales in that period, according to Thomson Financial.

Just last month, Schmidt was joined by finance chief George Reyes and co-founders Larry Page and Sergey Brin in selling even more stock, according to Yahoo! Finance.

Insider selling didn't come up on Tuesday's postclose conference call. More pressing was talk about innovation, mentioned 11 times, and "monetization," which registered more than 20 citations.

"We are relentlessly focused on this new end-user experience," Schmidt told analysts on Tuesday's conference call. "And that is where our future is. It is where the growth is. It is where the revenue and monetization is."

Judging by those insider sales, that's not the only place where the monetization is.

Dumb-o-Meter score: 93. Those poor Google execs didn't get a single "great quarter, guys!" from analysts on the call.

To watch Colin's video version of this column, please click here.