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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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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"?


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