Google Q1 Earnings Lower Than Expected, Stock Compensation Rose $141 Million

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Google Ditches YouTube, Goes Back To Relying On Nemesis Microsoft For Earnings Calls

Google announced earnings today slightly lower than expected. Earnings per share came in at $8.08, below the $8.11 consensus estimate of Wall Street estimates. Revenues, however, rose by 27 percent in the quarter to $8.6 billion. Net income of $2.3 billion was up 15 percent.

Larry Page started off the call, blandly stating that everything is working “as expected” with the management transition. He is “very excited about Google and our momentum” and gave shout-outs to Eric Schmidt and exiting product chief Jonathan Rosenberg who “we will clearly miss.” And then he handed the call over to CFO Patrick Pichette.

Operating expenses were up, largely because of increased payroll. Everyone at Google got a 10 percent salary increase. Google ended the quarter with 26,316 people, hiring 1,916 in the quarter. Senior VP Jeff Huber says on the call that these is a great time to invest in headcount.

But the talent wars seem to be taking their toll on Google. It is paying out a lot on stock based compensation. Stock based compensation increased to $432 million from $291 million in the first quarter of 2010. That is up $141 million. I wonder why.

When asked on the call how Google will define success in social since bonuses will now be tied to them, Pichette replied that is “an internal matter,” but “we wanted to signal to employees that social is a signal” they need to pay attention to and invest in.

Full 2011 Q4 Google earnings report below: