Friday, April 20, 2007

Google's first quarter report

Quick summary of the numbers:
-69% increase in profit from year earlier quarter = $592 million up to $1 billion
-66% increase in revenue from year earlier quarter = $2.25 billion up to $3.66 billion
-40% increase in searches from year earlier in February

Phil Davis has a very nice analysis of the report here:

-"If this is an arms race it is more like the one between the US and Mexico than the one between the US and Russia! Microsoft (notice we now ignore Yahoo) is fighting this battle with conventional forces and studying battle plans from the War of 1812 while Google is literally taking satellite images of their offices and devising strategies for battlefields that haven’t been invented yet"...

-"Make no mistake about it, Google is one of our country’s greatest exporters, pulling in over $100M a month in overseas revenues (imagine our trade balance without them!)"...

Eric Schmidt in the conference call said "Each of these strategies involves creating solutions that benefit both advertisers and users, and it is the synergy between them that we have been able to harness. Targeted, useful, effective advertising will continue to be our mantra; you all know that, of course. Technology and efficiency is the core of our technology approach, and it really does benefit end users." The contrast between Google's excellence in execution and Microsoft's stumbling and fumbling couldn't be greater. The cultural difference between these two companies is epitomized by Schmidt's statement. It is clear to everyone that Microsoft's main goal is to continue to milk their installed base while they fumble around trying to find a coherent strategy for the future.

Meanwhile, the contrast between Yahoo and Google is nicely summarized by this headline from another SeekingAlpha post: Google: Twice Yahoo's Size, Growing Revenues Nine Times As Fast...

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