Google CEO Eric Schmidt addressed the Wall Street investment analyst community last month for the Google quarterly earnings reporting ritual; He also addressed the company's own investors today for the Google annual shareholder meeting ritual .
What a difference three weeks makes? Or, more aptly, which Google story is the real one?
Schmidt to Wall Street in April, underscoring that SEARCH ADVERTISING IS KING:
Sometimes I worry that we spend so much time talking about all the new things that we don't focus as much on the core business, especially in our marketing and messaging. In looking at the quarter, the most important message is that our core business is very strong. It is the core business that is driving our success. Core services are as vital and vibrant and innovative as they could possibly be.
The success of our core business continues to let us take calculated risks in new markets and expand in new products.
Targeted, useful, effective advertising will continue to be our mantra; you all know that, of course.
Speaking to shareholders in May, however, Schmidt now touts a "new tagline, Search, Ads and Apps," according to Reuters reports, "reflecting a shift beyond search and advertising into online software applications."
Google has tried for years to make a money-making "shift" beyond its core multi-billion dollar business, but it has been unble to do so. The Google diversification strategy is indeed one of "calculated risks," but not a high return one.
Google is good at hyping Radio Ads and Print Ads, but no meaningful results have materialized to date.
What about "software"? Is there money in Apps for for Google? Google still has yet to turn on the "for fee" switch for its signature Google Apps "Premiere" offering, which has not lived up to its Googley expectations.
Google is still a very much a one-trick search advertising pony, a very rich one. Quarter after quarter, Google's revenues continue to be 99% pure, and in the billions.
The Google CEO also is sending mixed messages on the privacy front. Just hours ago, I reported NY to Google: Stop trapping consumer data, or no DoubleClick merger, citing the New York State Consumer Protection Board (CPB):
People may not realize it, but Google already collects and retains an enormous amount of personal data about the specific websites and advertisements that are visited by millions of people.
Schmdit today, however, refuted Goolge's tracking of user data, according to MarketWatch reports:
Google executives on Thursday tried to allay shareholder concerns that it has become too powerful for its own good. As put by a shareholder addressing Google's annual stockholder meeting Thursday, some Silicon Valley insiders now describe Google as "the new Microsoft, and not in a flattering way." Google co-founder Larry Page, in response to a shareholder question, said "our actions over the next 10 years will make it clear we're not the same kind of companies as you are worried about." Chief Executive Officer Eric Schmidt added the company has "made a commitment not to track user data."
Really? The CPB to the Federal Trade Commission:
Goggle, Inc. plans to buy DoubleClick Inc. This merger presents significant privacy implications. The combination of DoubleClick’s Internet surfing history generated through consumers’ pattern of clicking on specific advertisements, coupled with Google’s database of consumers’ past Internet searches, will result in the creation of “super-profiles,” which will make up the world’s single largest electronic repository of personally and non-personally identifiable information. Without appropriate safeguards, this database could, for example, be made available without consumers’ knowledge or consent to secondary users, including vendors of personal data, as well as made public as evidence in litigation or through data breaches.
Does it matter what the Google CEO says to the investor community? It should.
CNBC reporter Jim Goldman previewing the meeting today:
But as frustrated and concerned as Google investors are, lest we not forgot, it really doesn't matter because of the Class A and Class B shareowner structure at the company, which has founders Sergey Brin (28.6 million shares or 35.6% of the company), Larry Page (29.1 million shares or 36.2% of the company) and CEO Eric Schmidt (10.7 million shares or 13.3% of the company) in firm control of the company. With their Class B shares, the three executives control 66.2% of the vote. Shareholders have no voice. Period.
As I have said, Google’s secret weapon is a four letter word (SPIN),