The GOOG
My apologies for the delay in covering the Google quarter. As regular readers recall this is part of an exercise in covering all Internet-ad related fourth quarter earnings calls in more vigilant detail than I normally do. See EBAY here.
The results were surprisingly healthy and besides from clearing a few skeletons out of the closet by writing down investments in AOL and Clearwire, the firm did superbly in the current climate. The top line was up 17% but this masked the excellent 22% growth in Google owned properties (where they keep 100% of the revenue). That excellent result was accompanied by just a 4% year over year growth in its network business (where Google keeps roughly 20 cents in the dollar).
The International mix came in at exactly 50-50, driven by good growth everywhere but the UK.
How did the firm manage to grow in such a tough environment? Pricing held up: Paid clicks were up 18% year over year, which means that pricing or cost per click was essentially flat (another strong indicator in a land of depressed expectations).
The 10Q is not out yet so there may be more nuggets amongst the filing.
From Techcrunch’s conference call notes comes this little ominous comment: “On the mix issue, it is true the Adsense revenue was weaker. but Adsense for content had relatively strong quarter. In case of AdSense for search we did a lot of cleanup.”
Conclusion: Google continues to plough through a bloodbath of an environment untouched. The firm has monopoly control over the filet mignon of ad inventory in its own Google.com search while the rest of the world is left struggling and wondering how to value the remaining sausage and spam meat of inventory that is left.
