Schmidt: Worst of recession is over; Google is hiring
Google exceeded Wall Street's expectations for the third quarter by reporting net income of $1.88 billion, or $5.89 per share, on revenue of $5.94 billion, up 7 percent from the same quarter a year ago. Excluding traffic acquisition costs, Google's revenue was $4.38 billion. Wall Street analysts had been expecting earnings of $5.42 a share on revenue of $4.24 billion. (Statement)
Adjusted for expenses, the company reported a net income of $1.64 billion, or $5.13 per share.
In a call with analysts, CEO Eric Schmidt said that the worst of the recession is behind us and that the company feels "confident about investing heavily in our future." The first investment will be in people. Yes, Google is stepping up its hiring across the company but particularly in engineering and sales, executives said during the call.
The second investment is in innovation, particularly in advertising. Schmidt noted that many advertisers have told Google that they want to spend more money on Google ads but are looking for new ways to advertise. In addition, mobile search has seen 30 percent growth and the company considers mobile to be an up-and-coming business division hat could use some investment boosts.
The other mobile business - the Android mobile OS - has also come a long way from one carrier, one device and one country a year ago to 12 devices in 26 countries with 32 carriers today, with more on the way. Executives played up Android on the call, with Schmidt saying that "Android adoption is literally about to explode."
As for the widely anticipated delivery of the open-source computer operating system, called Chrome. Schmidt said the internal demos he's seen are showing "materially significant achievements in platform computing" that's different from the incumbents. There should be a version available later this year so developers can start playing with it.
The company also announced the Double Click ad exchange during the quarter - a key part of "opening the display ad ecosystem." One of the biggest investments in the quarter was an overhaul to AdWords and a shift to a new user interface that allows users to run their campaigns more efficiently and process new reports.
The company also took a moment to show how investments in different business categories all tie together. Consider what's going to be offered to small local businesses. The company is looking at new ad formats and recently has been testing a local listing ads in San Francisco and San Diego, which allows users to sign-up with a single form, pay a flat monthly rate and not worry about keywords or bids. Users can also get a free Web page that allows potential customers to call a business using Google Voice, which in turn, allows users to track how many calls were received as a result of the ad.
On top of that, Google is also looking at enhancements at its Maps business, including looking at the differences between what tourists might be looking for in a map, compared to what a local person want need - and how that might play into the results or ads for a business
Shares of Google were down about 1 percent in regular trading, closing at $529.91. Shares were rising in after-hours trading.
