UPDATED 19:27 EST / APRIL 16 2009

Even in Failure, Google Outperforms Expectations

image Numerous sources are finishing their live-blogging the Google Q109 financial results, but the bulk of the information is already out in the public.

The bottom line is that while analysts like JP Morgan were predicting 4% net revenue dips quarter-to-quarter, and Google were able to shave a percentage point off that, by only losing 3%. More impressive sounding, though, was their ability to increase their aggregate paid clicks by 3% for the quarter and by 17% year-over-year.

Google still maintains a huge pile of cash: around $2.2 billion in free cash flow.  There were also some important personnel changes, including Omid Kordestani, Senior Vice President for Worldwide Sales, taking the role of Senior Advisor for Eric Schimdt, and Larryand Sergey. The present President of Operations, Nikesh Arora, will step in as Kordestani’s replacement.

Further Into the Numbers and Into “Uncharted Territory”
According to CNet’s Stephen Shankland, during the call, Schmidt spoke in ‘somber tones’ about the company’s performance.

"No company is recession-proof. Google is absolutely feeling the impact," Schmidt said.

Isn’t Google recession proof, though?  During and following the call, Google stock surged 5%. Even though I’ve never been as bullish as Business Insider’s Henry “$2000-a-Share”  Blodget, I’ve always viewed Google as fairly recession proof.

Certainly, in a down economy, every company (even Google) must make adjustments. The company has a huge pool of cash for just such situations, they’re in a market position where as long as they maintain usefulness, their marketshare will never decrease.

Beyond the Numbers and of the People
image The results of this call have resonated with a lot of folks.  I spent a chunk of time on the phone after the call with both Michael Sean Wright as well as John Furrier.  Wright, a champion of the concept that the future is “open and live,” was impressed by the hints of the future, which he’ll elaborate more on later here in a separate post, but Furrier was more concerned about the future.

“My biggest comment would be that Omid stepping down combined with the loss of sales guy to AOL is a huge blow to the revenue side of the company,” said Furrier. “Omid has been a big part of their storied history basically making them the powerhouse in paid search and then built their international growth.”

That’s likely part of the reason why Eric is very open about his intent to keep Omid on board as an advisor to Google’s leadership.

The Live Web is the Future
What is the focus of that advice?  A recent editorial by Maureen Dowd in the New York Times might provide some clues. Hilarious meta-analysis by Valleywag aside, one quote in particular stuck out when I read the piece for myself:

He admits that it’s harder for newspapers to target ads as precisely as Google does. If you’re reading about a murder with a knife, he says, you can’t show a cutlery ad. He’s talking to newspapers about a new ad model that “understands your history” and your interests.

“They’d know enough about your demographic to know male, female, age group, what have you,” he says. “The whole secret here is the ads are worth more if they’re more targeted, more personal, more precise.”

Google must, at this point, realize that the smart data sets and personalized FriendFeed like status feeds are the source of this information, putting much more emphasis on the live web a must if they want to get the contextual deeper meaning they’re looking for.

This, in fact, is the future of all search for the forseeable future.  It extends beyond simply Twitter and Facebook, despite the present hype.  The “live” is spread across all the social nets like MySpace, Tagged, Facebook, Hi5, Twitter, FriendFeed, LinkedIn…. the list goes on. 

Beyond simply indexing all these social nets in a meaningful way, a method for tackling new methods as they arise must be formulated.  Without a strategy going in, by the time the ability to chronicle one socnet’s timeline is finished, it may no longer by the place to find the most relevant data.


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