Friday, July 21, 2006

Google Inc. doesn't disappoint

I got a lot more information from the Q/A session than from the prepared portion of the Q2 2006 conference call, but the gist is that Google is happy to have done well in what is a "seasonally weak" quarter. They're stock price didn't change too much at the end of the day, which probably means people are not too surprised. That as opposed to Yahoo, who dropped 20 percent cause they waited too long to announce a delay in their service upgrades.

Here's what I thought was worth sharing from the Q/A session:
  • Distribution deals relating to the Google Toolbar (presumably with companies like Adobe) cost Google on the order of 24 million according to a question-asker during the Q/A session.)
  • In response to a question about macroeconomic issues, Google remarks anecdotally that after 9-11, while they thought customers would cut back in spending, they experienced accelerated customer aquisition. They take this as a testament to the cost efficacy and reliability of advertising through Google.
  • Customers have larger budgets than Google can deliver on, so they're working on increasing inventory (more effective ads like video, increasing number of adsense publishers, ad real estate). In otherwords, when a customer says, place 5000 dollars worth of relevant ads and Google can't satisfy demand.
  • Net neutrality: Google doesn't foresee itself being significantly impacted by a compromise of net neutrality. Why? They have good relationships with ISPs and they have good content that is virtually essential. If ISPs were to start charging more for premium content, Google would probably be part of the package. They could probably get into the ISP game themselves in one way or another. They fight for it because it helps internet companies like themselves a couple of years ago (who'll probably be their customers or provide content for them to index). Finally, they mention how while the internet is fast, end-user access is slow and bottlenecked to the point where if ISPs want to upgrade this connectivity for end-users, they'd want to make tons of money from it. However, this seems to only be a problem in the US, as other developed countries don't have that "last mile" bottleneck and don't have an issue with net neutrality. I think that was Sergei talking.
  • Google isn't using Google Checkout to charge advertisers per purchase and before doing so would inform users that their data is being used in such a way. Google has a page that explains Checkout very nicely. In principle, Checkout could help people sell stuff with low processing costs no matter how they market it but there are big pluses for AdWords customers. For example, processing is free/discounted proportional to Adwords spending, etc.

SOURCE: their webcast

No comments:

Blog Archive