By Adam Lashinsky
July 18, 2008

Precisely six words in Google’s news release Thursday afternoon tell the whole story: “despite a more challenging economic environment.” The words are attributed to Google (GOOG) CEO Eric Schmidt, and they explain why the stock is plummeting in after-hours trading. Google shares were down 12% at last check. That’s $62 per share. Yes, Google’s missed Wall Street’s earnings expectations. But the real thing to focus on in the earnings call, beginning at 4:30 Eastern, is what Google has to say about the economy. Until now, as I’ve written, Google hasn’t been touched.

But the weak economy clearly is affecting online advertising companies. Valueclick’s (VCLK) pre-announcement knocked 20% off its stock Thursday. This can’t be good for Yahoo (YHOO), though those shares haven’t budged much so far.

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