Google CFO Sees Slowing Growth

Investors panicked over comments made by Google Chief Financial Officer George Reyes Tuesday, sending shares of search engine giant down as much as 14 percent by mid-morning before halving those losses. Reyes warned that he saw slowing growth on the horizon, and said Google would need to find new ways to make money.

"The search monetization gains have now been largely realized," Reyes was quoted by CNBC as saying at a Merrill Lynch investor conference in New York. Google follows a policy of not commenting on financial targets, which leads to wild swings when it misses what analysts expect it to make.

Thus, the swings could largely be attributed to Google itself and its reluctance to provide any sort of guidance for investors.

Analysts said that investors had overreacted to Reyes' statements, pointing to increasing market share and ad revenues. They also said that Reyes' speech largely was bullish, and the concerns over a possible slowdown in growth came at the very end.

Many believe Google's valuation is almost certain to recover after the company holds its annual Analyst Day on Thursday.

"The CFO's comments that they are going to have to find other ways to monetize the business should be taken positively, as we believe that this indicates that Google will aggressively purse other revenue streams," Piper Jaffray analyst Safa Rashtchy was quoted as saying in a research note.

However, further comments from Reyes at the conference may explain his concern, with the Google CFO indirectly asking investors to be more realistic in their expectations of further growth for the leading search engine.

"We're getting to a point where a law of large numbers starts to take root. At the end of the day, growth will slow," Reyes said. "Will it be precipitous? I doubt it. I am not turning bearish at all. I think we have a lot of growth ahead of us. It's a question of what rates."