Thursday, July 14, 2011

Google is innovating and growing big

Google (NASDAQ: GOOG) shares were sky-rocketing more than 12% in after-hours trading Thursday, after reporting its first round of quarterly earnings with new CEO Larry Page at the helm.

The search giant posted adjusted earnings per share of $8.54 on revenue of $6.92 billion, beating analyst estimates of $7.86 a share on sales of $6.5 billion.

CEO Larry Page kicked off the call by saying Google has signed up over 10 million users for its “Google+” social networking service, and now has over 160 million users of its “Chrome” Web browser.

The company is seeing 550,000 activations per day of smartphones based on its “Android” operating system, hesaid.

Regarding how to make money on all of that, Page remarked, “Now people rightly ask, how will we monetize these businesses?”

“Of course, I understand the need to balance the short-term with the longer-term needs, because our revenues and growth serve as the engine that funds our innovation,” he continued. “But our emerging high usage products can generate huge new businesses for Google in the long run, just like search.”

"Well-run technology businesses with tremendous consumer usage make a lot of money over the long term. Now I think about our products in three separate categories. First, there is search and our ads products, the core driver of revenue for the Company. Next, we have products that are employing high consumer success — YouTube, Android and Chrome. We are investing in these in order to optimize their long-term success. Then we have our new products — Google+ and Commerce and Local. We are investing in them to drive innovation and adoption. Overall, we are focused on long-term, absolute profit and growth, as we have always been."


Google killed the quarterly earnings. Google's core search business is rock solid for now. Google has great mid-term prospects with Android, YouTube, and Chrome - the worldwide mobile and web marketshare gains owing to these three products are nothing short of phenomenal (Google has multiple wars ahead - in Mobile with Apple, in Videos with Facebook, and Browsers with Microsoft)! Finally, hot innovations such as Google+, Commerce, Offers and Pages are on the rise, and at least one of these has the potential to hit 100M users. Google has shown that it has the staying power with Search, and able to gain marketshare with new products. New CEO Page has done very well, and appears to be turning around the Search Giant. 

Google is one of the top 20 innovators of the original Innovation Index.

In April 2011, I had posted this blog: Buy Google when market sells Did you buy?

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