Google CEO Larry Page Speaks! Big Reveal: $8 Billion In Mobile Revenues

From my Forbes.com blog The New Persuaders:

Investors have had a chance to digest Google’s third-quarter earnings longer than they expected, but they still have indigestion over the disappointing results. Can CEO Larry Page (yes, he will speak!) and his executives provide a Maalox moment on their earnings analyst call?

We’ll find out shortly, starting at 1:30 p.m. Pacific. You can watch it here as well. Keep refreshing for updates through about 2:30 p.m.

Update: It looks like Motorola was the chief culprit. Yes, less lucrative mobile ads seem to be a factor, but not one Google seems overly concerned about–it’s at least the third time I’ve heard executives say that mobile eventually could be better than desktop ads. Indeed, I was struck by the mention that one reason for the rise in costs that led to lower profits was sales of the probably near-zero-margin Nexus 7 tablet–which was striking for a single, non-advertising product. For better or worse, Google’s betting big on mobile, from ads to devices, and expects whatever shakes out to be positive. Investors clearly aren’t so sure.

And we’re underway. Page still has a strange froggy voice–seriously, really strange like he inhaled too much helium, so I can understand why he hasn’t spoken much in public. Anyway, he’s keeping his remarks short. You can read the prepared remarks on Google+. We had a strong quarter, he says, and I’m really happy with our business. Revenue was up 45% from a year ago.

Today, we leave in a world of abundance–abundant information and abundant computing. Many of us feel naked without our smartphone. Google is super-well-placed to take advantage of these opportunities. We’re seeing tremendous innovation in mobile advertising. Eventually, he adds, it will work even better than desktop ads.

We took a big bet on Android back in 2005. Most people thought we were nuts. Today, there are over half a billion Android devices, with 1.3 million more being activated every day. He suggests everyone go out and buy a Nexus 7 tablet.

Our run rate a year ago for mobile advertising was $2.5 billion. Along with apps and Google Play, it’s now over $8 billion. That’s quite a business, he says mildly–though based on the new way it’s calculated (see below), it may not be as amazing as it seems.

We had spread ourselves too thin. We sunsetted 17 more products last month. It’s more important than ever we converge our services.

We want to make advertising super-simple for our customers. Today, separate campaigns for desktop and mobile makes it more difficult and mobile opportunities often get missed. Advertisers should be free to think about their audience while we do the hard work optimizing across channels.

That’s the gist of his first widely public remarks (he spoke the other day at Google’s Zeitgeist event to the media elite).

Now CFO Patrick Pichette goes into some detail….

Read the complete post at The New Persuaders.

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No Larry Page, But Google Q2 Profits Beat Forecast on Light Sales

Image representing Google as depicted in Crunc...

Image via CrunchBase

From my Forbes.com blog The New Persuaders:

Providing a sign that online advertising continues to shine in a tough economy, Google reported a second-quarter net profit today of $2.79 billion, or $8.42 a share, up 11%, on a 35% jump in sales to $12.21 billion. Non-GAAP profit per share, the one analysts track, came in at $10.12, a little above the Street’s $10.04.

Those revenues included six weeks of its recent acquisition of Motorola Mobility. Google revenues alone were $10.96 billion, up 21%. Either way, revenues after payments to website partners were $8.36 billion, a bit lighter than analysts’ forecast of $8.41 billion.

In trading immediately after the close, shares rose about 5%, then eased back to a steady 3% gain. Google’s shares closed up today about 2%, to $593.06.

Although Street estimates were iffy given the addition of Motorola Mobility to Google’s results for the first time, Citi analyst Mark Mahaney was expecting a $9.99 non-GAAP profit per share on $12.45 billion in gross revenue. Without Motorola, he was expecting $10.76 billion in gross revenues, $8.23 billion in net revenues after payments to website partners. You can listen to the archived analyst call on Google’s YouTube channel.

The upshot after the call: Google executives sounded a confident tone about the business, though insight about Motorola was almost non-existent. In particular, Google appears committed to making mobile advertising pay off, shrugging off concerns about low mobile ad prices.

Google partners don’t seem worried about that either. Jared Belsky, executive VP at digital ad agency 360i, said in an interview that he thinks the rapid rise in mobile computing should be a net positive for Google simply because people are searching more hours of the day now. “This is a strategy for the long term,” says Belsky, who notes that its clients’ mobile ad search spending is now 14% of the total–an increase of 300% from a year ago. “Increasingly they’ll be able to monetize it.” Even more important, he says clicks on mobile ads have risen 300% as well as marketers provide better landing pages and people get more comfortable clicking on the ads as a result.

And the call begins.

Read the complete post at The New Persuaders.

Don’t Kid Yourself–Project Glass Will Produce An Advertising Bonanza For Google

From my Forbes.com blog The New Persuaders:

One of the first questions about Project Glass, the augmented-reality glasses that Google debuted in fine style this week with a skydiving stunt in San Francisco, was whether we’d see ads plastered on the tiny screen in front of our faces.

Google co-founder Sergey Brin, who has been championed this project to create a new kind of wearable computer, couldn’t have made his intentions clearer: No plans for ads. That’s despite the helpful video above that one wag created to show Google just how ads might work on Glass.

But make no mistake: While I think that, like the driverless car, Project Glass is cool and groundbreaking enough that Brin and the company for now simply want to see where it goes, Google’s advertising business could be a big beneficiary. And maybe not too long after they hit the streets next year for software developers and the year after that for consumers. Here’s how:

* Google will now know what you’re likely to want next–right here, right now. Already, smartphones are providing Google and others the ability to know where you are and serve you ads from nearby businesses. But potentially with Glass devices, Google will also be able to see and analyze not just where you are but what you’re looking at. …

Read the complete post at The New Persuaders.

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