Google sagging stock soars after strong 1Q showing

Google won back Wall Street with first-quarter earnings and revenue growth that surpassed analysts' predictions, propelled by an aggressive push outside the United States.

The pleasant surprise delivered late Thursday lifted Google's recently sagging shares by $76.42, or 17 percent, in after-hours trading. If the stock surges to a similar gain during Friday's regular session, it will be the largest one-day increase in Google's shares since the Mountain View-based company went public in August 2004.

"This is mostly a relief rally," Stanford Group analyst Clayton Moran said. "People are relieved that things aren't as bad as they thought."

The stock still has a long way to go to fully recover the $75 billion in shareholder wealth that evaporated as economic worries caused Google's market value to plunge by 35 percent since December. That left the company's shares at $449.54 at the end of Thursday's regular trading.

Google's performance indicates the Internet's advertising market expected to generate $44 billion in worldwide spending this year remains robust, especially outside the United States. Powered by its popular search engine, Google has built the Internet's most lucrative ad network.

Despite Google's reassuring first quarter, some analysts and investors remain cautious because so much of the company's ad revenue comes from small and midsize businesses more apt to curb their spending if the economy's woes worsen.

"The fact Google hasn't seen a slowdown yet just means that there might be another shoe to drop," said Darren Chervitz, co-manager and research director for the Jacob Internet Fund, which has sold about half of its Google holdings in recent months.

Google's aura of invincibility remains intact for now, much to the delight of its chairman and chief executive.

"It's clear we are well positioned for 2008 and beyond, regardless of the business environment we are surrounded by," Chairman Eric Schmidt said.