The company beat analyst expectations, though the stock has fallen nearly 5% in after-hours trading as some investors were hoping for more. Revenue was up 23% for $6.77 billion, with net revenue at $5.06 billion (estimate was $4.93 billion). Net income rose 37% to $1.96 billion, or $6.06 EPS; non-GAAP EPS was $6.76, beating estimates of $6.60.
66% of total revenue, or $4.44 billion, came from Google-owned properties, with 30% ($2.04 billion) from partner sites through AdSense. Paid clicks were up 15% Y/Y and cost-per-click was up 7% Y/Y.
Google has $26.5 billion in cash, and has grown to 20,621 employees up from 19,835 at the close of 2009 — in other words, they’re hiring.
Note that CEO Eric Schmidt was not on the call, and likely won’t be in the future (though the company says this was merely a matter of streamlining and that there’s nothing to read into it).
High level thoughts – As we enter 2010, it’s clear that the digital economy is continuing to grow rapidly. We are continuing to invest heavily in people, product, and acquisitions. We’ve already stepped up hiring. We have a strong pipeline of candidate, primarily in Engineer and sales. On Product we continue to push the envelope on two fronts: User experience and Ad Business. Acquisitions: we’ve been very active this year and have a strong M&A pipeline in place.
Wojcicki: Starting about a year about we asked ourselves why search ads had to be text links. In many cases it may be more interesting if we show a video/product in the ad. Search the movie Losers and you may see a video ad. Search Toys R Us and you get promoted site links. CTR on site links up 30-40%. Launched search funnel earlier this year. In display business, on platform side we launched new version of DoubleClick. Our new ad exchange has real-time bidding. As users transition to smartphones with mobile browsers, want to make it easier to extend campaign to those devices.
Huber: We believe in open platforms.. Our efforts in mobile are a great example of this at work. Schmidt said Goog is taking mobile first approach. Your smartphone knows where you are, so this location launched near-me-now. Turns your location into the search query. New stars in search feature, you click star next to result to save it. Makes it easier to find later (from mobile device). Android and Chrome gaining lots of momentum. Android powering 34 devices from 12 OEMs. Over 60,000 Android devices sold/activated a day. Our mantra w/ Android is “open”. The platform and Market. 38,000 Apps, up 70% quarter over quarter. I/O coming up.
Q: About stock buyback. Also, why is international growing
When we bought On2, it was a shared transaction. Seeing strong brands coming back . Internationally as rev didn’t take as material a dip relative to US.
Q: What percentage of rev comes from mobile display and enterprise combined? Is Nexus One profitable?
A: First one we don’t divulge. Nexus One, it is a profitable business for us. We are driving the business to be a profitable business from the get go.
Why isn’t Eric on the call? He’s everywhere. The fact that he isn’t on earnings doesn’t mean he isn’t available. It’s an issue of streamlining, shouldn’t read into it.
We hiring back in sales and engineering. The bar at Google has not changed. It is incredibly high.
We can’t speculate on relationship around search w/ Apple. We have historically had a strong relationship with them and look forward to continuing it in the future.
We’ve been very happy with growth in paid clicks. It’s a result of advertisers coming back, new ad formats.
Marketing spend. It’s clear that we have opportunities. Lots of opportunities to on-board customers. Most of marketing is ROI spend to get advertisers and customers on product.
On Nexus one being online only and how many sold. And comments on China.
We’re not disclosing number of Nexus Ones sold, we’re very happy with device uptake and impact it has had raising the bar showing what a smartphone can do. Can’t comment on stores. Bottom line on China where it was a tough situation, we believe we made the right decision. That said, our engineer force remains in China, sales force still in place. And we’ve moved back to HK for search.
Update on dist deal with News Corp. Is there a plan B if AdMob doesn’t go through?
AdMob: The case for AdMob is there is overwhelming evidence that mobile advertising industry is nascent, incredibly competitive. Apple announced they are starting their own. We’re positive about making it happen. Plan B if AdMob doesn’t work: Google does have AdSense for mobile applications, we’re investing in it. Want to reiterate we see this as new market with lots of competition. Apps vs. web: Google is investing, believes that HTML5 has possibility to enrich the web. News Corp: Google wants partners, we’re in negotiations of deal going to be renewed…There are different dynamics, we’re looking for a win-win.
Paid Click is up, combination of lots of factors. Advertisers come back, start spending. Google and ads team bringing new products to market.
Investing a lot in Android and Chrome.
Thoughts on shipping the tablet:
We’re really delighted by Chrome pickup rate. In terms of Tablets. Last year with Chrome OS we said we are working to have a netbook in the fall.