In just-announced fourth-quarter earnings, Google handily beat expectations for fourth-quarter profits. They rose fivefold (thanks to some $1 billion in writeoffs a year ago) on a 17% jump in sales, both considerably higher than analysts expected. But investors clearly had hoped for more, and they were sending Google’s shares down 5% in after-hours trading.
I’m on the call, which you can also listen to on YouTube. (And Seeking Alpha has the transcript here.) So far, I’m not hearing much surprising. But one message came through loud and clear: Despite recent battles with Apple, glitches in the rollout of its Nexus One cell phone, challenges in China, and competition with just about everyone in tech, Google’s core business–search advertising–is starting to roll again following the past year’s economy-driven slowdown. “We’re back in business full blast,” CEO Eric Schmidt said on the conference call.
In particular, Schmidt says display will be the “next huge business” for Google. And he says it’s a little-known story how successful Google has been in display–though he didn’t add any details. He views 2010 as the year this will become apparent. More on what Google plans to do in display from my BusinessWeek story last year.
Mobile may start to become a noticeable piece of that display ad business as well, bolstered by its purchase of AdMob in November. Then there’s YouTube, which Google also said was doing well–though again with no specifics.
In any case, it appears that whatever other challenges Google faces this year, its core business won’t be one of them. Which is more than most large ad-supported businesses (that is, traditional media) can say.