Waiting for the Economy to Bounce Back? So Is Google.
Waiting for the economy to come roaring back? So is Google. The search giant had a decent quarter, but not one that’s going to blow away Wall Street, or convince anyone that the economy is roaring back. But it’s an okay performance for a media company in a recession.
Top line for Google’s Q2 earnings: Net revenue of $4.07 billion and earnings of $5.36. The Street was looking for net revenue of $4.05 billion and earnings of $5.05.
CEO Eric Schmidt isn’t overly effusive: “Google had a very good quarter, especially given the continued macro-economic downturn. While most of the world’s largest economies shrank, Google’s year-over-year revenues were up 3%. These results highlight the enduring strength of our business model and our responsible efforts to manage expenses in a way that puts us in a good position for the economic upturn, when it occurs.”
Meanwhile paid-click growth was up 15 percent, and the company continues to clamp down on expenses: Google’s headcount actually shrank in the last three months, from 20,164 to 19,786 full-time employees.
I’ll be listening in on the call and occasionally updating here.
- Schmidt: “Youtube is now on a trajectory we’re very pleased with.”
- “Too early to tell when the recovery will materialize.”
- CFO Patrick Pichette: Still hiring, but decrease in headcount came from previously announced layoffs.
- Product SVP Jonathan Rosenberg: We’re focusing more than ever on power users.
- Mobile monetization picked up, driven by smart phones. YouTube’s monetized views have tripled in the last year.
- Sales boss Nikesh Arora: Small advertisers have stayed consistent during downturn, and larger advertisers who have been on sidelines are coming back.
- Schmidt on Chrome OS: We’re talking to manufacturers about designing “products that are very, very exciting.” Will Chrome run on existing hardware? Available for download? Still to be worked out.
- Was June soft? Schmidt: We generally don’t parse interquarter trends. On YouTube: Monetizing “billions of views” per months. [Nothing approaching real numbers or real context].
- Arora: “Significant sellthrough” in markets where Google has YouTube homepage for sale. Next phase of YouTube sales emphasis will be preroll ads on short-form videos.
- Arora on YouTube “trajectory” comment: We’re excited about getting pieces in place to drive this forward [i.e., not talking about numbers]. Customers accepting YouTube ads: “It’s becoming accepted user behavior where they’re going to watch premium content that people have invested in, they’re going to watch pre-roll ads.”
- Is YouTube profitable? Pichette: We don’t give out economics. But in the not-too-distant future, we see it being very profitable.
Here again, per Citigroup’s Mark Mahaney, is a crib sheet for interpreting the results (click to enlarge):
And here are the slides from Google’s investor presentation: