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"Google Results Disappoint"

By - July 17, 2008

The headline in the Wall St. Journal.

Google Inc.’s second-quarter net income rose 35%, but the results disappointed investors and shares fell nearly 10% in after-hours trading.

Update: If you want snark, but worthy analysis, read SAI:

GEORGE REYES takes over. Grab the coffee.

AdSense DOWN sequentially. First time ever. Attributed to quality control, seasonality.

Paid clicks DOWN sequentially. Again, first time ever. Attributed to quality control, seasonality.

UK DOWN sequentially. No FOREX benefit, seasonal weakness. Again, first time ever.

Operating margin down sequentially.

Interest income down (some of the EPS miss here). Lower cash balance from DoubleClick deal, and lower yields.

Free cash flow again hammered by massive CAPEX: Up modestly sequentially, but has essentially been flat for 4 quarters.


Queries in many sectors weak: autos, real-estate, finance, etc. Real estate down year over year. Y/Y auto ad spend up, but not on financing side (consumers hit). Consumers cautious. This is the first time Google has acknowledged weakness. Revenue performance remarkable in light of this.


Boring product details.

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One thought on “"Google Results Disappoint"

  1. nmw says:

    John, you might be particularly interested in something Eric Schmidt said during the earnings call:

    “there‚Äôs a flight to quality — and in particular a flight to measurability”

    For more details, see my blog post: