Unfortunately for Google (NASDAQ:GOOG), what would have been considered an extraordinary quarter under normal conditions, with net revenue increasing by 29 percent, it was overshadowed by the enormous surge in spending of 54 percent.
With new CEO Larry Page coming on board and concerns over his propensity to pursue dubious ideas, at best, this reinforces to many concerns over being mature enough and capable enough to profitably run Google.
While it's good to have a long-term outlook on a company, there are far too many generalizations at this time from Google management to generate concerns over whether or not they really have a specific plan and strategy in place other than shrinking the bureaucracy at the company and some undefined ideas from the incoming "visionary."
It reminds shareholders and investors of why Eric Schmidt had been brought on to run the company in the first place, which was to put an adult in charge.
Other than plans to hire over 6,000 new employees in 2011 and boosting the salaries of existing workers by close to 10 percent, there hasn't much concrete that the company has announced they're going to plow the money into.
As to clarity, the comment by Chief Financial Officer Patrick Pichette saying, "The discipline of the company has not changed; we're just really bullish on our prospects. I can tell you every element of the company (expenses from real estate to food) is scrubbed and scrutinized," means almost nothing.
They're bullish so they're spending, and they've allegedly thoroughly went over part of the company as far as expenses go.
To go over the expenses of any company is standard and responsible business practice. To announce it is largely irrelevant and meaningless. And the bullish comment is something every single CEO or CFO of a company would say.
As to specifics, there aren't any, and that, more than anything, is disconcerting to shareholders. To say the spending is for the purpose of pursuing multibillion business opportunities, as Google executives have asserted, again, says absolutely nothing.
There appears to be the increasing suspicion that Page isn't much interested in managing margins and earnings, but in expanding into new business areas and topline growth.
Net income for the quarter came in at $2.3 billion, or $7.04 a share. Excluding items, earnings were $8.08 a share, missing analysts expectations of $8.10 a share.
Page and Google now have a huge credibility problem, and the company could begin to be punished significantly if more details aren't released soon and what appears to be a cloud of secrecy surrounds the company.
Only performance will change this, and shareholders will be the final judges as to whether or not they have the patience to wait for Page, or if they feel they can trust him at all.
Google closed Thursday at $578.51, gaining $2.23, or 0.39 percent. After hours the company plunged $31.91 to $546.60, down 5.52 percent.
Showing posts with label Larry Page. Show all posts
Showing posts with label Larry Page. Show all posts
Friday, April 15, 2011
Tuesday, April 5, 2011
Market Shaky about Google (GOOG) Co-Founder's Return
Although there has been the news that Google (NASDAQ:GOOG) may be the subject of an anti-trust investigation into its dominance in the search segment of the Internet, that probably isn't the reason the share price of the company has been under pressure since the news co-founder Larry Page was returning as CEO.
It's the uncertainty surrounding Page himself, who has made the types of comments that make shareholders or potential shareholders nervous.
Page wants to revamp the company in order to eliminate a lot of what he sees as bureaucracy which interferes with the performance and innovation at the company.
While that's not a bad goal, what concerns shareholders is whether or not Page actually has the ability to discern the difference between real problems and those he views from his sometimes odd way of looking at things.
In other words, are his changes going to help or hurt the company.
Page has already started hacking away at middle management, which isn't necessarily a bad thing, but it won't be until shareholders see deeper into what he's planning that they'll make a decision on the company and Page.
For now it appears they're pricing that uncertainty into the shares of Google, which will probably waver some until things work themselves out and get clearer.
Google was trading at $571.49, dropping $16.19, or 2.75 percent, as of 1:25 PM EDT.
It's the uncertainty surrounding Page himself, who has made the types of comments that make shareholders or potential shareholders nervous.
Page wants to revamp the company in order to eliminate a lot of what he sees as bureaucracy which interferes with the performance and innovation at the company.
While that's not a bad goal, what concerns shareholders is whether or not Page actually has the ability to discern the difference between real problems and those he views from his sometimes odd way of looking at things.
In other words, are his changes going to help or hurt the company.
Page has already started hacking away at middle management, which isn't necessarily a bad thing, but it won't be until shareholders see deeper into what he's planning that they'll make a decision on the company and Page.
For now it appears they're pricing that uncertainty into the shares of Google, which will probably waver some until things work themselves out and get clearer.
Google was trading at $571.49, dropping $16.19, or 2.75 percent, as of 1:25 PM EDT.
Monday, April 4, 2011
Google's (GOOG) New CEO Ready for Prime Time?
With Google (NASDAQ:GOOG) co-founder Larry Page starting in his new position as CEO of the company today, there have been a number of observers who question whether Page is up to the task, taking into consideration some of his weaker traits.
Possibly of most concern is his past predilection for chasing after bizarre ideas. His overly-indulged rebellious streak and tendency to remaining aloof are other characteristics pointed out as questionable for someone taking the helm of a company like Google.
The question is probably more whether or not he can make the transition Steve Jobs did with Apple (NASDAQ:AAPL), where he was able to temper his idiosyncrasies and harness into tremendous creativity, but with discipline and control
Page retains similar characteristics in being smart, having a strong vision, and the passion to see it brought to fruition. But can someone like that embrace what Google has become without going off on tangent or odd directions? Only time will tell.
There are parameters in place which won't allow him to go too far astray. Think to Steve Jobs again. If he can be removed from Apple, like he was, Larry Page can surely be ousted at Google.
Of course he's been CEO before, but at that young age, including lack of discipline, it didn't work out for him or the company, and he was asked to step down.
Page has already made it clear as to what he has set as hit No. 1 priority, and that's to attack the bureaucracy and complacency he perceives at the company and start to act like a hunger startup again.
The bigger question is whether he can do it without instituting a shareholder rebellion against him. In other words, he can do what he wants as long as he's making them money. If he doesn't, there will be no doubt he will be shown the door once more.
But if he is able to make the changes while growing the company, he will position himself as another Steve Jobs who will be able to do little wrong.
At 38-years-old, that will guarantee him a job for life.
Possibly of most concern is his past predilection for chasing after bizarre ideas. His overly-indulged rebellious streak and tendency to remaining aloof are other characteristics pointed out as questionable for someone taking the helm of a company like Google.
The question is probably more whether or not he can make the transition Steve Jobs did with Apple (NASDAQ:AAPL), where he was able to temper his idiosyncrasies and harness into tremendous creativity, but with discipline and control
Page retains similar characteristics in being smart, having a strong vision, and the passion to see it brought to fruition. But can someone like that embrace what Google has become without going off on tangent or odd directions? Only time will tell.
There are parameters in place which won't allow him to go too far astray. Think to Steve Jobs again. If he can be removed from Apple, like he was, Larry Page can surely be ousted at Google.
Of course he's been CEO before, but at that young age, including lack of discipline, it didn't work out for him or the company, and he was asked to step down.
Page has already made it clear as to what he has set as hit No. 1 priority, and that's to attack the bureaucracy and complacency he perceives at the company and start to act like a hunger startup again.
The bigger question is whether he can do it without instituting a shareholder rebellion against him. In other words, he can do what he wants as long as he's making them money. If he doesn't, there will be no doubt he will be shown the door once more.
But if he is able to make the changes while growing the company, he will position himself as another Steve Jobs who will be able to do little wrong.
At 38-years-old, that will guarantee him a job for life.
Friday, April 1, 2011
Google (GOOG) Faltering in Chinese Online Market
Google (NASDAQ:GOOG) continues to lose market share in China, both in its search and Gmail services, the latest setback being the dropping of the its Web search service by online media company Sina Corp.
The Sina partnership was among the most important still held by Google in China, generating doubts as to a viable future in the country for them.
The Gmail service is being said to be harder to use in China along with questions concerning its map service, again pointing to problems of how they're going to grow in the largest online market in the world.
In the latest quarter, research firm Analysys International said Google's search share in China has plummeted from 35.6 percent last year to 19.6 percent.
Executives at Google have struggled with China, with outgoing CEO Eric Schmidt resisting co-founder Sergey Brin on his desire to stop censoring, which has brought the company to the point of increasing irrelevancy in a market they shouldn't have just given up on.
It generates concerns on the decision-making ability Larry Page, the other Google co-founder, who will be replacing Schmidt on Monday.
The idea of basically abandoning a market like China because of differences over views of censorship is irresponsible from a business standpoint to say the least.
With some at Google thinking a sovereign nation must adhere to its corporate philosophy, or rather the philosophy of a couple of people at the top, is ridiculous.
Google should have respected the decisions of China's leaders and worked over time from there, rather than offering more of an all-or-nothing mandate to them. In that regard, Google and its shareholders are the big losers.
The Sina partnership was among the most important still held by Google in China, generating doubts as to a viable future in the country for them.
The Gmail service is being said to be harder to use in China along with questions concerning its map service, again pointing to problems of how they're going to grow in the largest online market in the world.
In the latest quarter, research firm Analysys International said Google's search share in China has plummeted from 35.6 percent last year to 19.6 percent.
Executives at Google have struggled with China, with outgoing CEO Eric Schmidt resisting co-founder Sergey Brin on his desire to stop censoring, which has brought the company to the point of increasing irrelevancy in a market they shouldn't have just given up on.
It generates concerns on the decision-making ability Larry Page, the other Google co-founder, who will be replacing Schmidt on Monday.
The idea of basically abandoning a market like China because of differences over views of censorship is irresponsible from a business standpoint to say the least.
With some at Google thinking a sovereign nation must adhere to its corporate philosophy, or rather the philosophy of a couple of people at the top, is ridiculous.
Google should have respected the decisions of China's leaders and worked over time from there, rather than offering more of an all-or-nothing mandate to them. In that regard, Google and its shareholders are the big losers.
Monday, January 24, 2011
Google's (NASDAQ:GOOG) Eric Schmidt Selling $335 Million in Shares
In the process of exiting Google (NASDAQ:GOOG) as CEO, Google released in a filing with the SEC that Schmidt will be selling close to 534,000 shares in the company, valued at about $335 million at this time. Schmidt will sell the shares over a period of a year.
As of December 31, 2010, Schmidt holds 9.2 million shares of Google, according to the SEC filing. As of the close of Thursday's market closing, Schmidt's holdings in Google were worth close to $5.8 billion.
In the filing, which was filed alongside their earnings report, Google said, "The pre-arranged trading plan was adopted in order to allow Eric to sell a portion of his Google stock as part of his long-term strategy for individual asset diversification and liquidity. Using this trading plan, Eric can diversify his investment portfolio and can spread stock trades out over a period of one year to reduce market impact.
"Because this trading plan was established well in advance of a trade, it also helps avoid concerns about whether Eric had material, non-public information when he made a decision to sell his stock."
Also per the filing, Google said the plan is to have Schmidt lower his stake in the company by around 2.7 percent, to about 8.7 million shares. At that level Schmidt would retain a voting share of about 9.1 percent.
Google announced co-founder Larry Page will be replacing Schmidt as the CEO, while Schmidt will go on as Executive Chairman.
As of December 31, 2010, Schmidt holds 9.2 million shares of Google, according to the SEC filing. As of the close of Thursday's market closing, Schmidt's holdings in Google were worth close to $5.8 billion.
In the filing, which was filed alongside their earnings report, Google said, "The pre-arranged trading plan was adopted in order to allow Eric to sell a portion of his Google stock as part of his long-term strategy for individual asset diversification and liquidity. Using this trading plan, Eric can diversify his investment portfolio and can spread stock trades out over a period of one year to reduce market impact.
"Because this trading plan was established well in advance of a trade, it also helps avoid concerns about whether Eric had material, non-public information when he made a decision to sell his stock."
Also per the filing, Google said the plan is to have Schmidt lower his stake in the company by around 2.7 percent, to about 8.7 million shares. At that level Schmidt would retain a voting share of about 9.1 percent.
Google announced co-founder Larry Page will be replacing Schmidt as the CEO, while Schmidt will go on as Executive Chairman.
Friday, January 21, 2011
Google (NASDAQ:GOOG) Co-Founder Larry Page Replacing CEO Eric Schmidt
After a huge quarterly win by Google (NASDAQ:GOOG), a major announcement was made that CEO Eric Schmidt was being replaced by co-founder Larry Page.
Schmidt will reportedly stay on in the role of Executive Chairman. The change will be implemented on April 4.
Google's earnings for the quarter were $8.75 a share, easily beating analysts' estimates of $8.09 a share. Concerning revenue, analysts had been looking for $6.06 billion in the quarter, but Google was able to generate 6.37 billion.
Google closed the day at $626.77, losing $4.98, or 0.79 percent. Google was soaring in after hours trading.
Schmidt will reportedly stay on in the role of Executive Chairman. The change will be implemented on April 4.
Google's earnings for the quarter were $8.75 a share, easily beating analysts' estimates of $8.09 a share. Concerning revenue, analysts had been looking for $6.06 billion in the quarter, but Google was able to generate 6.37 billion.
Google closed the day at $626.77, losing $4.98, or 0.79 percent. Google was soaring in after hours trading.
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