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Android activations have hit 350,000 units a day.  (Source: New York Daily News)

Android is now the world's most popular OS. But concerns remain about Google's new CEO and its recent spending increases.  (Source: Mission Geek)
Android is outselling everybody, but the investors are disgruntled

It was a tale of mixed news for search and smartphones giant Google Inc. (GOOG) with yesterday's earnings report.  The company reported its Q1 2011 calendar quarter earnings [press release] and while there's cause for optimism, investors seemed to almost unanimously feel that the bad outweighed the good.

I. The Good News -- Great Growth

The good news was that Google continues to beat analyst earnings expectations.  It recorded first quarter revenue of $8.58B USD, well above the average analyst prediction.  That represents a terrific 27 percent year-to-year growth.

Video ads on YouTube appear to be at last increasing revenue and paid ad-clicks over all recorded a nice 18 percent raise.

And in the conference call on the earnings, Google's Jeff Huber reported that the company's smart phone OS, Android, continues on its prodigious growth pace.  The OS is now recording 350K activations per day.  Not long ago it was a big deal when Android hit 100K activations per day (May 2010) and 200K activations a day (September 2010).

To top off the good news, Android users now have 3 billion apps installed on their smart phones, a testament to the success of Google's Android Marketplace, which today has over 200,000 apps.

II. The Bad News -- Leadership Concerns, Rampant Spending

But the "bad" news, as far as investors were concerned, was Google's elevated spending pace.  One big spending spot was the workforce.  Google went on a spending spree, growing its workforce 28 percent.

And Google also gave all its employees a raise last year.

This year, it says it will hire 6,000 more employees (it hired 2,000 in Q1 2011) and raise pay, on average, another 10 percent.

The company also spent a lot of money giving its various departments more funding.  It also picked up its pace of acquisitions, something that's expected to continue as the company tries to fortify its social networking, music, and mobile businesses.

Investors are also concerned about new CEO Larry Page,who assumed the post on April 4.  While lauded as a visionary who likely will slash bureaucracy, some wonder if he will offer the same quality of communication that 10-year veteran Eric Schmidt -- someone viewed as more of a businessman -- offered.

III. Investor Reaction

The company's investors were off put that Mr. Page only came on the earnings call for a few minutes and failed to deliver a detailed roadmap of his plans for the company.  In an interview with Reuters, Jim Tierney, chief investment officer of asset manager WP Stewart, an investment house that holds a significant number of Google shares, states, "My sincere hope is that over time he (Page) enunciates the strategy much more clearly."

BGC Partners analyst Colin Gillis, another major investor expressed more concern about the company's spending habits than its communication.  He remarked, "You got expenses growing faster than revenue and some people were caught by surprise by the willingness of the company to spend. But Larry Page has signaled pretty clearly that he is going to be driving up expenses. If the expenses are targeted and result in future revenue streams, then good for Larry. If not, that results in an undisciplined spending approach."

Google Chief Financial Officer Patrick Pichette tried to quell spending complaints assuring investors that his company was still taking a very "disciplined" approach and that every spending proposal would be "scrubbed and scrutinized."

Investors seemed unconvinced, though and share prices dipped over 5 percent during the day's trading.



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Youtube ad revenue won't last
By DanNeely on 4/15/2011 3:03:18 PM , Rating: 5
quote:
Video ads on YouTube appear to be at last increasing revenue and paid ad-clicks over all recorded a nice 18 percent raise.


Sooner or later advertisers will realize that 99% of the clicks they're getting are from people trying to dismiss the $#@)($*#@)(*&%)(! $#@)($* popovers to watch their video; and putting them there is the moral equivalent of encouraging click fraud by posting text saying "please click some ads to give me more money."




RE: Youtube ad revenue won't last
By cjohnson2136 on 4/15/2011 3:08:53 PM , Rating: 1
I would agree but the issue is you have a lot of idiots that actually follow those ads and buy stuff. I have a few friends that actually buy 50% of the pop ads they see. I also do a face palm when they tell me of the new thing they bought from a pop up


RE: Youtube ad revenue won't last
By DCstewieG on 4/15/2011 3:10:18 PM , Rating: 5
Those idiots subsidize our TV and internet use. Be happy :)


RE: Youtube ad revenue won't last
By cjohnson2136 on 4/15/2011 3:19:32 PM , Rating: 2
That is true but then I have to explain to them why they get viruses every month lol


RE: Youtube ad revenue won't last
By Pirks on 4/15/11, Rating: -1
RE: Youtube ad revenue won't last
By cjohnson2136 on 4/15/2011 3:47:45 PM , Rating: 2
No I would never advise them to spend that much money, but one does have a mac and got a virus


RE: Youtube ad revenue won't last
By Pirks on 4/15/11, Rating: -1
RE: Youtube ad revenue won't last
By cjohnson2136 on 4/15/2011 4:07:29 PM , Rating: 2
If he knew how I would tell him that. He was using just his Mac nothing else. I wish I got to see it but he got it when he went home for Winter Break and said he took it to a repair shop which just did a wipe and clean install. I really wish I could of seen it.


RE: Youtube ad revenue won't last
By Pirks on 4/15/11, Rating: -1
RE: Youtube ad revenue won't last
By cjohnson2136 on 4/15/2011 4:30:35 PM , Rating: 2
Yeah but I wanted to see an infected mac in the wild with my own eyes. I have only heard of the very unique beast. Lol


RE: Youtube ad revenue won't last
By Pirks on 4/15/11, Rating: -1
RE: Youtube ad revenue won't last
By cjohnson2136 on 4/15/2011 5:02:03 PM , Rating: 2
I know but it still would have been funny to see. I wanted to show it as proof to the vis com majors at my school that say macs don't get viruses


RE: Youtube ad revenue won't last
By Pirks on 4/15/11, Rating: -1
RE: Youtube ad revenue won't last
By nolisi on 4/15/2011 5:32:52 PM , Rating: 5
It is kind of sad that you can't install anything worthwhile on a Mac until Windows is installed :)))


RE: Youtube ad revenue won't last
By FaceMaster on 4/15/2011 8:01:56 PM , Rating: 2
Please stop with those REALLY stupid, childish smilies.


By EricMartello on 4/22/2011 5:32:58 PM , Rating: 2
Oooooooook man! :))

^_^


RE: Youtube ad revenue won't last
By B3an on 4/15/2011 11:12:09 PM , Rating: 1
Anyone with half a brain knows OSX gets viruses.
I know someone who got a virus on OSX and in the Apple store they couldn't even fix it. They said it would be sent off to be fixed only is she signed something, basically saying not to mention to anyone that OSX had got a virus.


RE: Youtube ad revenue won't last
By StevoLincolnite on 4/15/2011 11:18:53 PM , Rating: 3
Difference between Mac and Windows is that the majority of the time a Virus/Trojan won't completely bring down a Windows 7 install, so it's an easy fix. No re-formatting or sending away the machine is usually required.


By themaster08 on 4/16/2011 3:26:11 AM , Rating: 2
I imagine it's probably the same for OS X too, except Apple have to masquerade their problems somehow don't they? Similar to the exploding iPods. Unfortunately for Apple, some of their customers still opened their mouths.

Funny how problems like that seem to just drift off into the sunset without a second thought.


RE: Youtube ad revenue won't last
By rudy on 4/18/2011 4:33:34 PM , Rating: 2
That is not true IMO. Many viruses for any OS are set up so they turn off tons of stuff and change all kinds of settings. Then they keep trying to download more viruses UAC usually blocks the new ones but at that point the one that did the damage usually did so much you cannot figure out all the settings that need to be fixed so you are pretty much stuck with a reformat or at least a repair.


RE: Youtube ad revenue won't last
By damianrobertjones on 4/16/2011 6:58:23 AM , Rating: 2
I'd love any extra information with regards to what you've posted above! I wonder how many times it happens?


RE: Youtube ad revenue won't last
By integr8d on 4/16/2011 1:25:35 PM , Rating: 2
Speaking of which, Appledefects(dot)com seems to be either down or completely missing. I was thinking about getting a new MBP and wanted to see if there were any outstanding issues. Anyone know? Did Apple buy them out and shut them down?


By damianrobertjones on 4/16/2011 6:55:01 AM , Rating: 1
Would it not be better to simply tell the guy, "Don't run as admin"?


Fake numbers
By vision33r on 4/15/11, Rating: 0
RE: Fake numbers
By cjohnson2136 on 4/15/2011 2:58:11 PM , Rating: 2
Actually stock price is affected by tons of variables not just are they beating the competition. If investors are scared of direction then stock drops. Stock is always a meaningless number imo. If just shows how the company is doing based on some future analysis. With the fake numbers I doubt it. I mean there are a few billion people in the world. So I wouldn't discredit the number just because they say it.


RE: Fake numbers
By DCstewieG on 4/15/2011 3:08:42 PM , Rating: 2
quote:
Something doesn't add up..

Oh, I don't know, maybe margin? Apple makes hundreds on every phone it sells. Google....not so much.


RE: Fake numbers
By SPOOFE on 4/15/2011 8:29:44 PM , Rating: 2
No risk, no reward. I know Google makes (or at least made?) a handset, but "make money producing our own hardware" is not a major aspect of their business model.


RE: Fake numbers
By MozeeToby on 4/15/2011 3:14:55 PM , Rating: 2
Lets play a game of "Guess how much hardware companies pay Google for Android". Maybe the results of the game will explain how 350k Android phones being activated doesn't automatically mean loads of profit for Google.


RE: Fake numbers
By cjohnson2136 on 4/15/2011 3:18:25 PM , Rating: 2
Buzz the answer is 0 what's my prize lol


RE: Fake numbers
By FaaR on 4/15/11, Rating: 0
RE: Fake numbers
By cjohnson2136 on 4/15/2011 3:49:27 PM , Rating: 2
Considering it was a joke anyway I was not to concerned with all that. So how about you stop being a grammar Nazi. ;)


RE: Fake numbers
By erple2 on 4/18/2011 1:43:09 PM , Rating: 2
Thread should now be closed.


RE: Fake numbers
By Harinezumi on 4/15/2011 3:17:10 PM , Rating: 2
First of all, Android is not the biggest component of Google's business, so its success or failure is not the sole or even main determinant of the company's financial performance.

Second, analysts react to financial statements based on whether a company has managed to meet or outperform their expectations, not whether or not it managed to increase its profitability. If a company reports that its profitability grew by 10% when the analysts expected it to grow by 15-20%, the analysts will be disappointed and the share price will drop.


So...
By Aihal on 4/15/2011 5:40:43 PM , Rating: 5
In short, investors and shareholders seem to be upset that Google is creating jobs, raising salaries and increasing the funding for their departments, thus reducing potential profit *they* could get.

Stay classy, capitalism.




RE: So...
By cjohnson2136 on 4/15/2011 5:42:17 PM , Rating: 2
No they are fine with that but the way Google is doing they think is risky. That's why they worry. IMO I don't think they should worry though


RE: So...
By karndog on 4/16/2011 11:06:08 AM , Rating: 3
Don't know why you were downrated when what you said is true.. Must've been an armchair stockbroker who disagreed with you. It's a fact that once a company is listed on the stock exchange it is pressured to cut costs (corners), and eliminate jobs, which in turn severely impacts long term technological advancement and actual working class employees just so a select few gain an extra few percent on their dividends.


RE: So...
By Skywalker123 on 4/17/2011 4:32:55 AM , Rating: 2
You mean become efficient?


RE: So...
By Skywalker123 on 4/17/2011 4:30:44 AM , Rating: 2
Why should shareholders lose money to create jobs/


RE: So...
By daidaloss on 4/19/2011 1:56:08 AM , Rating: 1
Look I'm new to capitalism, since I was born in a Eastern European country. The way I understand this "stockholder capitalistic mentality" is more like ".. you don't like the profits Google makes, you invested 10 millions USD in Google stock, and wanted to earn 200 millions in just 2 years? You aren't happy with Google hiring new talent so to increase long term profitability and most important innovation? Buy some Faceboook stock from Goldman, you moron, and feck off". Just sayin'....


The investers need to shove there head in a blender.
By LeeKay on 4/16/2011 8:44:06 AM , Rating: 4
Its companies like google that keep our economy moving. Hiring people because you have the income to is how corprate companies need to move. The investors should realise they invested in google because its a sucessful company and one that is desirable not for the return. If you want a return in your money invest in startup companies not companies that have foot holds.

Investers made IBM the ugliest company to work for. THey make billions every quarter but they keep shrinking the workforce to keep its wage budget low and its dividends high. This makes a very bad working enviroment and breads poor work relationships between its employees. Google get more work from there employess and they have a desire to come to work.




By StevoLincolnite on 4/17/2011 12:07:36 AM , Rating: 2
Plus Google's offices is like a flippin' playground. o.0 Who wouldn't wanna' work in it over any other desk job!?


Larry Page
By HrilL on 4/15/2011 2:42:10 PM , Rating: 2
Hes already stated he is going to be running Google more like a start thus traditional investors get scared. This will be better for both the smart investors willing to take a little more risk and Google. Going back to their roots is a good idea imo.




RE: Larry Page
By icemansims on 4/15/2011 4:00:36 PM , Rating: 1
Well, investors want traditional business models so they can somewhat predict what will happen. With Google, that doesn't apply. It makes them nervous because they don't know what to expect. That being said, that's really what makes Google so successful too.


RE: Larry Page
By RedemptionAD on 4/15/2011 11:18:45 PM , Rating: 2
Publicly held companies biggest weakness is that they are at the mercy of a fickle public. It can get them a quick shot of revenue quickly, but it also is their largest weakness as any move is scrutinized by people that may not know the long term plans and google may not be able to reveal them for businiess security reasons and so it makes it harder for google to be google. IMHO Privately held businesses are the best option for long term success without the issue of being at the mercy of fools.


This isn't a bad thing to do..
By StraightCashHomey on 4/15/2011 9:30:36 PM , Rating: 2
quote:
This year, it says it will hire 6,000 more employees (it hired 2,000 in Q1 2011) and raise pay, on average, another 10 percent.


You pay to get the talent. The talent will lead to innovation. The rest of the workforce will just get hired at the 2nd place company. I look at the fact that they are giving raises to their employees as a reason to BUY stock.




By drycrust3 on 4/17/2011 5:06:08 PM , Rating: 2
quote:
Google went on a spending spree, growing its workforce 28 percent.

quote:
You pay to get the talent.

I totally agree. Those shareholders who don't like this don't HAVE to own Google shares, they could easily buy shares in companies where the senior management, just like them, think highly skilled people are a hindrance to their company making a profit, and that every employee is stealing from the shareholders. What? Those companies with that philosophy lag behind the rest of the industry and don't make much profit? WELL DON'T BRING STUPID IDEAS TO SUCCESSFUL COMPANIES!!! SKILLED PEOPLE = QUALITY PRODUCTS!!!


Good!
By Xcpus on 4/16/2011 5:38:07 PM , Rating: 2
I say Good... Google is not your usual "Conservative" business model. Google is far more Liberal minded and I like that about them. Investors can go F themselves. It is investors who apply pressure to Corporations to cut costs resulting in skewed safety measures which result in oil spills and Nuclear Meltdowns. It is high time for radical changes to this socio-economic system under which we all live.

I also notice the same Apple fans always posting negative comments on threads having to do with "anybody" but Apple. Just so you know... you not being a Creative person and instead simply accepting someone elses creative vision does not make you "special"... it makes you a statist, cultist, religious fundamentalist or Corporatist (various words one could use).

Some of us enjoy being able to do more with a device (having that freedom) than perhaps the maker's originally intended because some of us are actual g33ks, Intellectuals, Engineers, Scientists, Techies and Nerds. Yeah we're not "hipsters".




RE: Good!
By Xcpus on 4/16/2011 5:45:11 PM , Rating: 2
What I basically mean is that there needs to be a balance between the wants and needs of investors and those of the Creative minds over at Google.

Google invests in the American Economy and hires new talent which ensures a continuous stream of creative ideas. Google works as a model which reduces hierarchical relationships in the workplace. It is still a Corporation (no a co-operative) but one that allows more autonomy and decision making capabilities to its employees resulting in an increase in creative ideas.

The less restrictions on Creativity the more likely you are to be a company that comes up with the next GREAT idea (or ideas as is the case with Google).

On the other hand Apple restrains creativity. The ideas come from Steve Jobs and must be implemented the way HE wants. That level of authoritarianism is why Apple does not truly innovate (Microsoft thought of the idea of Tablets... Apple simply implemented it first successfully for example). RIM had the idea behind a Smartphone and Apple simply one upped them on that.

Google, on the other hand, has original ideas like Google Earth, Maps, Gmail (first 1GB+ free email service) and what they've done with YT is turn an idea into a medium with the potential for revolutionary change.

Like Facebook and Twitter; Google is at the forefront of new ideas that are helping shape and change the world. The irony of it all is that these tools are being used, quite successfully, to challenge the Status Quo (established world powers) across the globe.


thanks
By magneticfield on 4/18/2011 4:57:11 AM , Rating: 2
That was a nice article, and very interesting posts too!




Investors
By Zingam on 4/18/2011 12:31:04 PM , Rating: 2
I like how investors are outraged by higher salaries and hiring new employees. What investors really want are slaves. Slaves to work for free until they die. Slaves don't need money to survive just some food and slaves do not need social security and pensions or medicare.

So long live slavery - the inverstor's best friend!




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