Feeds

Google flaunts Meltdown-proofiness

Revenues pumped 18 per cent

Build a business case: developing custom apps

After another spin of that big dial on its top-secret money machine, Google hit $5.7bn in revenues during the fourth quarter, an 18 per cent increase from a year ago.

As advertised, Mountain View is Meltdown-proof.

Profits were down significantly, dropping 68 per cent to $382 million. But if you exclude $1.09bn in impairment charges covering the dipping value of the company's investments in AOL and fledgling WiMAX outfit Clearwire, profits were up, beating the guesses of Wall Street guessmen.

Following the afternoon release of Google's Q4 numbers, company shares spiked 3.42 per cent in after hours trading.

In the face of a worldwide recession, Google saw paid ad clicks leap 18 per cent in the quarter. During a conference call with reporters and analysts this afternoon, Eric Schmidt and company argued that in tough times, search advertising has a particularly strong appeal.

"[Google's Q4] results show that advertisers value targeted, measurable ads," Schmidt said. "In the fourth quarter, advertisers invested where ROI was the highest - in other words, online. It's one of the few really good stories of the fourth quarter. Our sales force went out to tell people that revenue is what you need and the quickest way to get revenue it to use targeted Google advertising."

As he's done before, Schmidt also argued that tough times send more shoppers online. "Consumers, of course, are also using search for comparison shopping, and that helped us as well," he said.

What he didn't say is that Google spewed about 57 per cent more ads onto its search pages in Q4. More ads mean more clicks. And more clicks mean more revenue.

Most advertisers on the company's AdWords platform, Google says, are not spending their daily budgets. So, when Google feels the need to show more ads, it can show more ads.

Google says that in expanding ad coverage, it's improving "the quality" of ads shown. But that's what it said last year as it shrunk ad coverage. You don't improve quality by spewing 57 per cent more ads onto your pages.

During the company's Q2 earnings call in July, co-founder Sergey Brin hinted that Google would purposefully expand ad coverage after months of shrinkage, contradicting colleague Jonathan Rosenberg, and in September, the company seemed to follow through with an overhaul of its ad platform.

Sergey Brin - and Larry Page, the other co-founder - have now disappeared from Google's quarterly earnings calls. "[CFO] Patrick [Pichette] and I will be taking the lead on these calls," Schmidt said this afternoon. "Larry and Sergey will occasionally attend. They continue to focus on technology and innovation, which of course they do so very well."

During the call, Google also announced an employee stock option exchange that will allow Googlers to retrieve their options from the bottom of the ocean. "About 85 per cent of our employees have at least some stock options under water," Schmidt said. "So we're going to offer an exchange.

"Part of [employee] compensation is stock - that's how it happens in high-tech, and it needs ultimately to have some value over the longterm." In other words, Google hopes to keep people from leaving.

Mountain View expects that new options will have an exercise price equal to its closing share price on March 2, 2009 and that old options with exercise prices above this level will be eligible for exchange. But this isn't set in stone.

Employees, Schmidt said, will have to wait an additional 12 months for the options to vest. According to Google, the move will cost the company $460 million. ®

5 things you didn’t know about cloud backup

More from The Register

next story
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.