Within minutes of a speech by George Reyes to investors, Google shares had plunged 14 per cent. The Google finance chief told a conference organised by Merrill Lynch, the investment bank, that the company’s 18-month push to boost revenue by fine-tuning its advertising system had realised most of the remaining gains.

In morning trade in New York today, shares in Google rose $1.10 to $363.72, regaining just a fraction of the $27.76 they lost in the previous session.

“At the end of the day, growth will slow. Will it be precipitous? I doubt it,” Mr Reyes said. “I’m not turning bearish at all. I think we’ve got a lot of growth ahead of us. It’s a question of what rate.”

Mr Reyes’s remarks — surprisingly frank for a senior executive at a formal event — were viewed as even more stunning given that Google is just two days away from hosting its annual analysts’ conference at its Googleplex headquarters in Silicon Valley.

The steep decline in Google’s share price lasted for much of the morning, before company insiders began crafting a less inflammatory version of Mr Reyes’s remarks in an effort to quell the sell-off.

The panic subsided as the document was circulated among investment analysts and Google shares made up some of their losses. By the close on Wall Street the shares were still down 7.2 per cent at $361.00.

The big one-day correction was the third suffered by Google in recent weeks. The shares, which hit a record high of $475.11 in early January, were hit two weeks ago by concerns about future profits growth.

The market has also been uneasy since Google missed its Wall Street profits forecast for the fourth quarter of the year, because of a miscalculation of its tax payments and because of weakness in the UK market.

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