In Google has easily topped all the Wall Street expectations with the help of strong advertising sales and deft cost controls. By the end of the days trade, the companys stock was trading at roughly 6 percent higher. The search giant is benefiting from the growing online ad market. In the third quarter, its profits have gone up by 26 percent and revenue by 37 percent.
Going into Google earnings, analysts were primarily concerned about the Motorola Mobility deal, the economy and Facebooks traction. Google has put off those concerns with its earnings reportfor now. Analysts are of the opinion that the figures bode well for the fourth quarter.
CFO Patrick Pichette said, I know that many of you have had questions about general economic outlook. What were seeing is not terribly surprising or different from what youre all seeing watching on TV and reading in the press. While obviously we dont control the economy or the exchange rates, we do very much control our own operating agenda, and thats why we will as always stay focused on what we control.
Larry Page, CEO of Google, called the quarter great and talked up Google+, which now has 40 million users. He also revealed that Google+ has 3.4 billion photos uploaded since launch. Our ultimate ambition is to transform the overall Google experience, making it beautifully simple, almost automagical as we understand what you want and can deliver it instantly, said Page.
Yeah, Larry Page did use the word automagical, we are still trying to comprehend what that means.
The mobile focus
The investments that Google has made in the mobile business are also bringing in significant amount of revenues. Page said the revenue run rate for Google's mobile business is more than $2.5 billion, a significant leap from $1 billion just a year ago.
Google had announced its plans to acquire Motorola Mobility Holdings for $12.5 billion in August this year. The company expects to close the deal this year or early 2012. From Motorola Mobility, Google will gain access to one of the wireless industry's largest patent libraries, as well as hardware manufacturing operations that will allow Google to develop its own line of smartphones.
Android is already a huge success, with 190 million devices in the fold. The OS has presence in 130 countries. Talking about the latest version of Android OS, Larry Page said, Im super excited about the soon to be released new version of Android called Ice Cream Sandwich. Thats right, Ice Cream Sandwich. You dont believe what weve managed to get done in this release.
Larry Page also took a jab at Microsoft for ensnaring Android device makers into patent related lawsuits. "They continue resorting to legal measures to hassle their own customers," Page said, referring to recent licensing deals between Microsoft and companies such as Samsung, HTC and Acer, many of which are also Microsoft customers. "We see Android going gangbusters and we don't see anything that's going to stop that," he added.
However, some analysts continue to be wary about Googles aggressive moves into the mobile space, which is believed to be a low-return business. Moreover, Google does not have much experience of this field. Some analysts also fear that if Google makes a move towards building its own devices, it could antagonise other handset makers like Samsung Electronics and HTC Corp, which might start looking for non-Android solutions.
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