October 19, 2007 | Friday
Google profits, hires and market share all up
By Jackie Danicki - Blogger in News |PPC |Search Engines |Google |Microsoft
Google giveth, and Google taketh away. That was the message of caution for analysts and investors as the search giant announced Q3 earnings up 46% - a significant increase from the same quarter last year.
This came on the same day that ComScore released its latest search share data, which showed Google gaining another half a percent to capture 57% of the market.
So what’s the less good news?
While analysts have cheered Google’s hold on the search market, they have been more cautious about its rapid hiring and heavy expenditures. The company Thursday said it added 2,130 new employees since the end of its second quarter in June, and noted that, “We expect to continue to make significant capital expenditures.”
The main concern is that, in the case of a general economic slow-down, Google’s ad revenues would be hard hit. There are also big question marks over whether all of those 2000+ new employees really are the best and the brightest available. The company’s CEO, Eric Schmidt, had a ready explanation for all that:
“The number you’re seeing is essentially an overhang from hiring that had been agreed to many months earlier.” Schmidt said many of the new hires were either studying or teaching at universities when they signed on earlier this year, and were only able to come on board after the end of the school year.
Yet the company also said that much of the new hiring has been happening in the area of business development. So Google even recruits its sales staff from academia?
On the same day all of this bright news was announced for Google, Microsoft CEO Steve Ballmer used a somewhat weak basketball analogy to compare and contrast his company to the market leader. But he also backed down from statements earlier this year that Google is a “one trick pony”.
On Thursday, he said he meant the one-trick comment “in a very specific way.”
“They started in one area, they get really good in that area and then fill out around core...Microsoft is unique in that we’ve already got two areas. We started out as a desktop computing company and now we’ve got a huge enterprise business. We’re trying to do devices and entertainment, and advertising and the Web. We’re trying to be a three- or four-trick pony.”
Whether that is a strength or a liability is yet to be seen. For today, at least, the pressure is on the veteran monolith as it struggles to compete with the new kid on the block.
The bottom line: Times are good for Google, but there’s no room to get complacent - and they know this. Google execs had a great Thursday - as long as nobody mentioned the F-word…
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