Just landed. Everyone knows Google crushed it again. But the stock seems to be priced already for crushing performance, because it did not pop in after hours. In fact, it dipped.
Seeking Alpha has the transcript of the earnings call. It’s really worth a read if you want to geek out – esp. Larry and Sergey’s comments on search and advertising, and the Q&A from the analysts.
Eric Schmidt says: With respect to things like the fingerprinting, one of the things that we are very concerned about is we want to respect the copyright ownership, especially the ownership issues and the authors of copyrighted works. We are in development of a number of technologies that will help us there: audio fingerprinting, video fingerprinting. It’s in various stages of being rolled out. That is an area of big research in the computer science community and also a significant investment here at Google.
An area of big research? Get with it, G. When it comes to music fingerprinting, it is no longer an area of active computer science research the way it once was. Shazam solved this problem in 2000, Fraunhofer solved it in 2001, and Nokia solved it in 2002. I have seen very impressive, real world demos from all three. And while I haven’t seen the demo, someone from Microsoft claimed to me to have solved it in 2004.
These solutions are all robust to noise, to chatter/talk in the audio stream, car traffic in the background, etc. So they are perfect for weeding out all those “lip-synching to popular tunes” user-generated videos that have the content companies all up in arms. Not to mention the actual music videos themselves.
With so many other people developing solutions, I want to know why you didn’t develop your copyright detection solutions before purchasing YouTube, not after. To me that does not seem very respectful of copyright holders, especially when I know you (as a company) knew about some of these aforementioned technologies years ago.
John, do you have a crush?
I think finance.google.com is totally neat-o. Does anyone know when they started including news quotes (i.e. from news sites) on it?
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ah, perhaps just a little further back than when it was launched — see 209.85.135.104/search?q=cache:8Ey3CJzIMnkJ:googleblog.blogspot.com/2006/03/spring-is-season-for-love-and-data.html
copy/paste: 03/spring-is-season-for-love-and-data.html
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If I’m not mistaken, I thought Google was using Yahoo’s stocks for their site.
It seems as if they’ve changed it now. And it looks really good.
So exactly where are the gems of insight on search and advertising from Larry and Sergy? We extracted them using Coning Technology. Larry’s comments Coned at 75%; Sergy’s at 78%. Coning extracted the higher end thinking within:
Coning Index 75% Larry Page
100%] I’d like to first talk about search performance. Now, there’s five different dimensions of search performance that I want to talk about. One is the number of current user queries, the response time, the size of index, the document update frequency, and the complexity and sophistication of the ranking algorithms. We continue to invest in a global infrastructure that supports our search system because that investment allows us to improve performance among all these dimensions. As a result, we can now handle more user queries and respond more quickly.
83%] Our index is substantially larger and is updated more often, and the system supports ranking algorithms that are more computationally expensive and deliver better results to the user.
90%] To make this range of information more useful, we are working on integrating different types of results — video, images, news, books and so on — all in one place. We are now blending book results into the main index and we will add more going forward. We are excited about providing a truly seamless user experience in search.
Coning Index 78% Sergey Brin
90%] We also released an upgrade of our landing page quality system. This removes the low-quality landing pages from our ad results and improves users’ experience after they leave Google and click on an ad. This in turn encourages users to click on more ads, because they have better and more useful content when they do so.
92%] In sum total, we paid over $3 billion in 2006 to our partners. This is a figure that we expect is going to increase as we ramp up our video, radio and print programs. Advertisers are now using our targeting platform to place brand advertising across our content network, and they’re going to have more branding options as the YouTube inventory comes online.
83%] Checkout yielded good results for merchants too, who benefited from higher conversion rates and free transaction processing. In the six months since Checkout’s launch, thousands of small and medium merchants have signed up, and we now have more than 20% of the Web’s top 500 retailers. That list includes ToysRUs, Linens ‘n Things, Petco and Buy.com, and there are many more you can all see for yourselves on checkout.Google.com. We expect this momentum to continue as we expand Checkout beyond the U.S. and deepen integration with other products.
85%] On an even more important note, I would like to talk about our unique culture and energy that we have been not only preserving, but even enhancing since our startup days. Our new transferable stock options will help by letting us continue to attract and retain talented people. We are proud to have been selected by Fortune as the number one best place to work in 2007. Fortune highlighted the usual Googley things like our free food, beanbags and lava lamps. But what is not apparent from the outside is the set of rigorous systems and processes that we use to manage our growth while maintaining this entrepreneurial zeal. As we grow in size and expand to new locations, we never forget that we are global citizens entrusted with taking care of users worldwide.
Google’s strength in search will continue to snowball, because in my experience market share begets market share, particularly as the average age of users starts to inch past 30. If a rival, even a strong rich rival, makes a better mousetrap, the masses have already chosen, and laziness and intertia prevent an easy switch (at least in search. Social networking may be another matter as the usership is so young).
P.S. As for GOOG’s stock price valuation, methinks it still has a way’s to go even at such a rich P/E. Again, notwithstanding all the periphery businesses they have going, it all tracks back to two variables: 1. how many people use them for initial search, and 2. How many popular websites and publishers elect to use them as ad partners.
Relevance of results may be thier Achilles heal longterm, as it is perhaps their most frustrating trait, and I don’t see them doing a lot of consumer training on how to structure search terms to get the best results.
If I were Google, that would be my Priority 1: spending money on marketing to train consumers to use them in a proprietary way (this is how you search for multiple terms on Google), just as Microsoft has trained almost all of us to adapt to Windows’ unique if crappy ways……yes, it’s crappy, but we’re all reluctant to change because it’s “what we know.”
Relevance of results may be thier Achilles heal longterm, as it is perhaps their most frustrating trait, and I don’t see them doing a lot of consumer training on how to structure search terms to get the best results.
I know I am being a bit repetitive and pedantic, but I tend to agree with this statement. And wonder if it is one of those things where, if someone receives more training on how to be a better searcher, the more one actually spends time revising searches when a particular formualtion fails, rather than giving up and clicking an ad.
The geeks will always learn this stuff on their own, but that’s ok, because the geeks probably never click ads, either. But if the other 98% of your search customers also learn it, then again, they spent their time revising their queries, rather than clicking ads.
What I am implying, as usual, is that it is actually not in Google’s interest to have an incredibly educated searchforce, because that would mean less ad-clicking. It is a mantra I keep repeating, though, and I kinda want to be proven wrong. The arguments I hear from Google are unconvincing, mostly because all the poweruser geeks on Slashdot claim that they never click ads.
Does someone have a good argument, why an educated searchforce would *not* click fewer ads?
how about “poor quality in organic results”?
nmw: Yes, I’m starting with the assumption that, for a particular query, the organic results have yielded less than satisfactory results. Even though Google does well, on average, there will always be queries that “fail”.
When those queries do fail, a user has two choices: (1) modify (improve) his/her query, or (2) click an ad.
My theory is that the more intelligent a user is, the more the user knows how to modify his/her query using all of Google’s “hidden”* tools, the more likely he/she is to actually spend time using those tools, rather than giving up and just clicking an ad.
Am I wrong in this theory? This is what I would like to know. Because if I am not wrong, then that means user education runs counter to Google income. More user education = less Google income.
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*(hidden in the sense that Google does not make it easy to discover what they are. Click “advanced search”, and you won’t even find most of them.)
I think I agree — an educated user would tend to not waste their time searching for a needle in a haystack — they would use more *targeted* engines (e.g. hotels.com or blowjobs.com or hotels.net or blowjobs.net or whatever).
Mr. Cerf (Google’s VP of “evangelism”) calls this “domain name guessing”:
http://www.circleid.com/posts/
vint_cerf_keynote_domain_roundtable/#2031
OK, so the question is (I *guess*): will “educated” users continue to use a search engine that sucks?
(no pun intended đ nmw
So what is the main reason for the stocks going down for the last weeks?
Thank you
Sohbet OdalarĂ˝ CanlĂ˝