) $372 million in net profits sank far below them. Revenues of $1.29 billion came in right at the consensus guess -- unfamiliar terrain for the company's number crunchers. On Feb. 1 its nosebleed stock price fell 7%, to $401, as more than $9 billion in market cap went poof.
Sure, much of the profit shortfall can be pinned to a higher-than-expected tax rate. But Google's stumble lends credence to skeptics who say its near-complete reliance on search ads leaves it exposed as that industry begins to decelerate. While Google has busily begun to plow into new businesses, evidenced by its January acquisition of radio advertising house dMarc Broadcasting, such efforts could take a long while to pay off. With the search god suddenly less divine, investors may be stricken with a loss of faith.See "Google: Just Not Good Enough" Two other titans turned in startling results. ExxonMobil (XOM
) on Jan. 30 said black ink gushed to the tune of $10.7 billion in the fourth quarter and $36.1 billion for 2005, the richest yearly result ever for a U.S. company. GM (GM
), in contrast, bled $4.8 billion in the quarter and $8.6 billion for the year, partly because of restructuring costs at both the auto maker and bankrupt Delphi. The skies didn't darken and rain frogs, but Alan Greenspan did preside over his last Fed meeting on Jan. 31. As expected, the Federal Open Market Committee boosted rates a quarter-point, to 4.5%, and said a March hike "may be needed." Ben Bernanke takes over just after growth sagged in the fourth quarter, to an annual rate of 1.1%. This quarter is likely to witness a rebound. While President George W. Bush's State of the Union address didn't play many new tunes, business groups are pleased that he reprised some greatest hits. Among the priorities in the Jan. 31 oration: making the R&D tax credit permanent, health insurance tax breaks for individuals and small businesses, liberalizing immigration and trade, and a drive to cut U.S. thirst for Mideast oil by 75% by 2025. With his job approval rating near 40% and his political capital worm-eaten, the President probably won't see much of this agenda become a reality. He did get a victory this week: Samuel Alito won approval to the Supreme Court, albeit with more "nay" votes than anyone confirmed in a century except Clarence Thomas.See "A Probusiness State of the Union" "This is a simple case. It is not about accounting. It is about lies and choices," said prosecutor John Hueston. Responded Daniel Petrocelli, lead attorney for Enron ex-CEO Jeffrey Skilling: The defense will not be "hear no evil, see no evil. This is a case of: There was no evil." So spake the two sides in opening statements on Jan. 31. Skilling and ex-Chairman Kenneth Lay are charged with masterminding a colossal fraud. The trial, perhaps the most symbolically important to stem from the early-2000s wave of corporate scandals, is expected to last four months. The man of steel proved his mettle again. On Jan. 27, Lakshmi Mittal launched a surprise $22.7 billion offer for Luxembourg's Arcelor. Over 30 years, Mittal has forged his company, now called Mittal Steel (MT
), into the world's top producer, and he's clearly not done taking risks. He faces fierce political wrath on the Continent and may need to hammer out a higher bid to triumph.See "Mittal Steel's Most Daring Move" You can't be too rich or too thin, so Kraft (KFT
) keeps trying. After a year in which sales by volume barely rose, the nation's biggest foodmaker is tightening its belt another notch. Because Wal-Mart (WMT
) and other retailers crave mainly "category killers" -- that is, the No. 1 or No. 2 brands in a category -- Kraft has slimmed down its product portfolio by 20% over two years. Now it wants to shed 10% more in 2006, and it said on Jan. 30 that it will shut up to 20 plants and trim 8,000 jobs through 2008. Maybe Kraft should sample its own South Beach Diet dishes? Investors in Pfizer (PFE
) are breathing a bit easier. On Jan. 27 the drug giant said the FDA had approved its inhaled insulin product, Exubera. It's the first form of insulin in the U.S. that doesn't require needles, and thus it could rack up more than $1 billion in sales by 2010, according to securities firm Friedman Billings Ramsey (FBR
). The drugmaker, whose stock has been bedridden for five years, badly needed a shot of something -- and got it: Shares have risen 4% since the news. Carl Icahn bagged $116.5 million on shares he has held since November, and Prince Alwaleed bin Talal landed 87 trophy inns to spiff up his hotel empire. On Jan. 30, Fairmont Hotels & Resorts (FHR
) -- owner of such properties as the Banff Springs and Toronto's Royal York -- agreed to a $3.9 billion sale to Colony Capital and the Saudi prince's Kingdom Hotels International. The $45-a-share price beat Icahn's earlier $40 bid. Icahn can use his swag in pursuit of bigger game: It will more than cover the $6 million fee he's paying former Viacom (VIA
) and Universal President Frank Biondi to head his team in a planned May proxy battle to unseat Time Warner's (TWX
) board. We're finally going to have it our way, said Burger King, which on Feb. 1 announced its intent to file IPO documents in late February or early March. Never publicly traded in its 52-year history, the second-largest burger chain is owned by a trio of private equity firms led by Texas Pacific Group. Burger King's dreams could be complicated by a nasty spat with the chain's National Franchise Assn. -- a black eye for CEO Greg Brenneman, who had pledged to fix ties with franchisees. He may be 80, but he's not going gently onto that good tennis court. In fact, Hank Greenberg's drive to build a new insurance empire seems to be scaring American International Group (AIG
). The former AIG chief wants C.V. Starr, one of two private outfits he controls, to be free to sell whatever policies it likes to new customers. His old employer is trying to stop C.V. Starr, which writes about $2 billion worth of premiums a year, from pursuing those ambitions. Greenberg had offered to sell it, but the parties could not agree on a price. Now, says spokesman Howard Opinsky, "If AIG is intent on competing, Mr. Greenberg wants to compete." He is already making investments around the world and has bold ambitions for C.V. Starr and for Starr International, which holds $20 billion of contested AIG stock. Needless to say, lawsuits are flying. Greenberg is also battling New York Attorney General Eliot Spitzer and is requesting access to Spitzer's internal documents, aiming to start a probe of his own.