Investors are pausing to catch their breath as the Google ( GOOG) Express slows down. CEO Eric Schmidt told investors in January that 2006 would be "an exciting year." But so far, Schmidt has been right for all the wrong reasons. Google shares have dropped 12% in 2006, fueled in large part by January's fourth-quarter earnings shortfall. Another reversal came Tuesday, when finance chief George Reyes made some indiscreet comments about the company's growth prospects. Now, as Google prepares to address investors Thursday at a meeting in its home of Mountain View, Calif., the huge stock gains of 2004 and 2005 seem like ancient history and the company's fans are growing restive. Google rose $2.12 Wednesday afternoon to $364.74. " Yahoo! ( YHOO) and eBay ( EBAY) basically give tutorials on how revenues are generated," says Philip Remek, an analyst with Guzman & Co., who has the only sell rating on the stock. "It would be nice if Google would give a tour of the process of monetizing search." Remek, who is planning to attend the meeting, and other analysts are anxious for details about how often advertisers are charged for improper clicks. Though Google has said that click fraud doesn't have a material impact on its earnings, it hasn't provided any details. Other details that Google will likely be pressed on include the impact of keyword pricing, updates on some of its offerings such as Google Video, which have proven to be uninspiring, and its spending plans. Google appears to have a long way to go in improving its communications with investors. It didn't disclose Reyes' speech until the day before he was scheduled to give it. Even then, the company appeared caught by surprise by the impact his remarks had on the stock price. Google tried to soften the impact by issuing a clarification several hours later -- after the market closed.
Google's generally close-mouthed approach creates problems for investors and analysts who try to forecast results from a company as complex as Google. Consensus figures include estimates with wide ranges. Analysts' expectations for the current quarter range from $1.82 to $2.12, according to Thomson Financial. Sales estimates range from $1.37 billion to $1.54 billion. Google also took the unusual step of soliciting analysts' opinions about the topics that they would like the company to discuss. The company wouldn't officially comment on the survey.