Mobile momentum
Google did really well in the mobile market, considering it "tripped" into it. Mobila ads are fetching a billion plus dollars quarterly. "We already announced that [mobile] was a billion-dollar run-rate business," Google SVP and CFO Patrick Pichette said Thursday on its first-quarter earnings call. "And we tripped into it. ... We tripped into a billion dollars. That gives you a sense of the momentum."
"Thanks in large part to Android, search on mobile devices has increased by more than 500 percent in the past two years," Jeff Huber, Google's SVP of commercial and local, said. Over 350,000 Android devices are activated daily, translating to over 127 million activations annually! Over 3 billion apps have been installed. Huber said "Android Market has benefited from its online presence and the addition of in-app billing."
SVP of Advertising Susan Wojcicki noted that for mobile ads, AdMob Inc. has more than 150 million iOS and Android devices receiving ads every month, up 50 percent over the last four months. And, many advertisers are running mobile-only campaigns and customizing them to the handsets with location and click-to-call, a feature that over half a million advertisers are using.
Hiring key talent in volumes
Google added 1,900 employees in the first quarter and is set to hire 4,000 more in 2011. Google is treating their employees well. Everyone in Google got a 10 percent salary increase. More employees and higher salaries led to increased expenses, resulting in lower EPS for the quarter. Huber claims that 2011 will be Google's biggest hiring year to date.
Management changes
When asked how the executive change-up has affected business, CFO Pichette only reiterated that it's business as usual. Co-founder Larry Page is the incoming CEO, and it appears that he is willing to make strategic investments in resources and talent to make Google better and more innovative. Mr. Eric Schmidt has stepped down from the CEO role; however, he remains as the chairman of the board.
In his first week on the job, Page promoted seven of his managers to senior positions, including Andy Rubin, who heads up mobile efforts, and Vic Gundotra, who is in charge of social initiatives, according to a person briefed on the changes. The executives will report directly to Page, the person said. (source: Bloomberg)
"In short, the company’s position has not changed," Pichette said. "Google is a technology company focused on users and looking for products that can affect billions of people."
Google stock movement
In after hours Google stock was down more than 5.6%, and is expected to fall further tomorrow. This will present an excellent buying opportunity. Fundamentally, there is nothing wrong with Google. Google sales growth is over 25% year over year, the Android mobile market is booming, YouTube is picking up steam, new talent pool is growing, and social networking is getting a renewed focus in order to compete versus Facebook. These are huge positives, and make Google a safe long term play. Buy Google when market sells tomorrow.
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