Is Google’s Future Predictable?

Google has started gearing up to take advantage of a recovering economy after almost a year of revenue slowdowns and cost-cutting. According to the Search Engine giant, the recovery in its core business and online advertisement is no farther. Google (GOOG) has again started the process of recruitment and capital spending. “We now have the business confidence to invest in the next phase of innovation“, Google Chief Executive Eric Schmidt said on a conference call with analysts.

Google is again back to normal according to the charts. It has done way beyond the imaginations. Revenue excluding payments to advertising partners rose by 7%, to $4.38 billion where the expected mark was $4.25 billion (surveyed by Thomson Reuters). “We were all looking for acceleration in revenue growth from Google, and they delivered,” says Sandeep Aggarwal, an analyst with financial-services firm Collins Stewart. Net income reached the mark of $1.64 billion (around 27%), or $5.13 a share.


These results are the clear indications of the sailing away of the recession clouds. Phew! Technology companies are doing better than the previous year and showing better amount of earning. Chipmaker Intel too had a third quarter sale rise than they had last year. Investors of Google have seen the improvement in the conditions and the results were seen in the Shares. Till October 14th Google had a 67% rise in its share which closed at 535.32. Several analysts have also raised the 12 month target to 600.

Executives also added the fact that, Company’s video site YouTube is back on track. According to the company, 90% of YouTube’s home-page ad inventory, its main revenue generator, sold out in the third quarter.

Analysts also wonder whether Google’s more aggressive stance on capital spending and hiring could hurt profit margins, though that didn’t seem to rattle investors. In the third quarter, Google continued to keep a lid on capital spending and hiring. It reduced its workforce by 121 people, to 19,665, though Schmidt said that stance is changing. “We are short key technical talent to achieve some of these broader initiatives,” he said.

And with coming Android Phones, Chrome OS for Cloud PCs, YouTube with Ads, Google Books integrated with search, super collaboration tool Google Wave, and much more, this company is just getting started.


Add a Comment

Your email address will not be published. Required fields are marked *

six + seventeen =

CommentLuv badge