Google soars on results, Yahoo on Microsoft comments

Date: 17th October 2008

Author:  The National Business Review

Google's shares have climbed 8% after hours on news the search giant is defying the slump. Yahoo zoomed 15% following comments by Microsoft CEO Steve Ballmer that his company acquiring Yahoo "would make economic sense".

For Q3, Google's profit rose 35% to 1.35 billion on revenue that was up 39% to $US5.54 billion.

However, the company has already put the brakes on, says CEO Eric Schmidt, as the global economy enters what he says is "uncharted territory".

Although the number of people who click on its search ads grew 18% quarter-on-quarter, Google trimmed costs 18% during Q3 in anticipation of turbulance ahead, and reduced its usual frantic pace of hiring, brining on 519 staff during the quarter, compared to 2130 during Q2.

Mr Schmidt also reiterated recent comments by himself and Google cofounders Sergy Brin and Larry Page that the company wants to diversify more into display advertising.

Google's shares have fallen around 20% in the past month, in line with other large cap techs.

Meanwhile, Yahoo shares jumped 15% today following remarks by Microsoft CEO Steve Ballmer that his company is opening to reinstigating its on-again, off-gain takeover talks with Yahoo CEO Jerry Yang.

Any Microsoft-Yahoo deal, long propounded by your correspondent as the only way for Microsoft and Yahoo to rein in Google's huge lead in online advertising, and nascent lead in software-as-a-service apps, will also have immediate impact on local portals MSN.co.nz and YahooXtra.co.nz – which were created in opposition to each other after Telecom's divorce from Microsoft split the original Xtra.co.nz, but which may now need to recombine.

By Chris Keall

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Google’s Green Agenda Could Pay Off

Date: 28th October 2008

SAN FRANCISCO — Google, the Internet search and advertising giant, is increasingly looking to the energy sector as a potential business opportunity.

From its beginning, the company has invested millions of dollars in making its own power-hungry data centers more efficient. Its philanthropic arm has made small investments in clean energy technologies.

But in recent weeks, Eric E. Schmidt, Google’s chief executive, has hinted at the company’s broad interest in the energy business. He also joined Jeffrey R. Immelt, General Electric’s chief executive, to announce that they would collaborate on policies and technologies aimed at improving the electricity grid. The effort could include offering tools for consumers.

Meanwhile, engineers at Google are hoping to unveil soon tools that could help consumers make better decisions about their energy use.

And while the company’s philanthropic unit, Google.org, has invested in clean energy start-ups like one that uses kites to harness wind power, Google is now considering large investments in projects that generate electricity from renewable sources.

“We want to make money, and we want to have impact,” said Dan W. Reicher, director for climate change and energy initiatives at Google.org.

The timing could be off. With a recession looming and oil prices dropping, investors might pressure Google to curtail its clean energy ambitions.

Google’s shares have lost more than half their value in the last year, and some analysts complain that the company has a long history of dabbling in new initiatives with mixed results. It still relies on one business — small text ads that appear next to search results and on other sites — for the bulk of its earnings.

And Google’s online success does not guarantee success in the energy business.

But none of this has deterred Google from going deeper into the alternative energy business. To support its efforts, it has hired a growing number of engineers who are conducting research in renewable energy, former government energy officials, scientists and even a former NASA astronaut, whose hands-on experience with all sorts of electronic gadgets is being put to use to develop energy tools for consumers.

“They are a high-profile actor in the energy field,” said Daniel M. Kammen, a professor in the energy and resources group at the University of California, Berkeley, and an adviser on energy to the Obama campaign. “Google is in the lead in terms of human resources as well as money.”

Last year, Google unveiled an ambitious initiative called RE C, denoting its goal to develop renewable energy that is cheaper than coal. Since then, much of the public focus on the initiative has been in the approximately $45 million in investments that Google.org has made in wind, solar and geothermal energy start-ups.

That effort now also includes a small but growing group of engineers at Google who are conducting their own research and development in those technologies, which Google said it might commercialize in the future.

Google.org also announced a project last year to develop plug-in hybrids. To make them widely available, the electrical grid would have to be upgraded so that cars could be plugged in at multiple locations, where they could be recharged and consumers billed.

Google now says it is interested in developing technologies to support some of those upgrades, as well as other tools at the intersection of energy and information technology, like “smart” electrical meters. The partnership with G.E. is aimed in part at exploring some of those opportunities.

Google has also increased its lobbying in Washington on energy issues. And the company is looking at larger investments in renewable energy projects that would be primarily motivated by their profit potential, not their environmental promise.

How far Google plans to go with its energy efforts, the company does not yet know, or at least is not willing to say.

“We have been debating, ‘What are the business opportunities for Google in this area,’ ” Mr. Schmidt, Google’s chief executive, said recently. “And I think right now, we would answer the question that our primary mission is one of information.”

Mr. Schmidt said that Google would be active in “information businesses or communications businesses” related to energy. Speaking more broadly about the energy sector, he added, “As to whether we will be in these other businesses, we will see.”

Google is known for stealth. The search engine company kept its advertising ambitions under wraps for years, a strategy that helped it become the dominant tech company in Silicon Valley. And with $14.5 billion in cash in the company’s coffers, it has plenty of resources to keep making further investments in new energy ventures.

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Google’s Green Agenda

Date: 2nd October 2008

Author:  Business Week

Posted by: Rob Hof on October 02

A few hours after Google issued a clean energy manifesto, CEO Eric Schmidt on Wednesday night held forth on the search giant’s plans and hopes for setting an entirely new agenda for energy in the U.S. This morning, Jeffery Greenblatt, Google’s Climate and Energy Technology Manager in the San Francisco Bay Area, issued Clean Energy 2030, a proposal to reduce the country’s dependence on fossil fuels. The plan calls for greatly expanded use of wind, geothermal, and solar energy.

Schmidt commissioned the $4 trillion proposal, which is intended to complement other alt-energy proposals from former Vice-President Al Gore and onetime oilman T. Boone Pickens, as a way to influence whatever new administration is elected. Speaking to an audience of several hundred people in San Francisco, he said moving to alternative energies will more than pay for itself eventually in savings of various kinds, and blamed “a total and complete failure of leadership” in the government for an inability to set the country on the road to energy independence. “It’s cheaper to fix global warming than to ignore it,” he said. “The payback on energy efficiency is enormous.”

Google’s not spending much in absolute terms on its investments in alternative energy companies—about $45 million through its Google.org philanthropic arm. But its executives have been spending a lot of time lately pushing green energy. Why?

One reason, of course, is that the company is a huge user of electricity for its data centers—though it blogged today that its data centers use only 20% of the electricity of the average one. So any reduction saves Google a lot of money. Another reason, Schmidt frankly admitted to reporters after his talk, is that it’s positive branding for Google.

Yet another, very Googley reason, is that fixing the energy grid, the system by which energy gets delivered from where it’s produced to where it’s needed, is one of the most fascinating systems design problems around. Indeed, he says Google’s systems and network design expertise could contribute to development of the “smart grid”, a proposed new electrical infrastructure that can run much more efficiently and reliably. It includes such notions as allowing electricity to flow back and forth between power sources ranging from solar and wind farms to plug-in car batteries around the country. “If you do this right, it sure sounds like the Internet,” he said.

Still, he says there’s a less practical reason that comes straight from Google cofounders Sergey Brin and Larry Page: Hokey as it may sound, they see greater use of alternative energies as a way to make the world better. So does Schmidt, who added, “To me, it’s a moral issue. We should demand that people realize the implications of short-term thinking.”

Some Wall Street analysts have raised eyebrows at Google’s attention to energy issues, but Schmidt waved off those concerns. “Our shareholders are used to this sort of stuff from Google,” he smiled.

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Google defies downturn with surge in profits

Date:17th October 2008

Author: Marketing Week

Google has reported a 26% profit surge to $1.35bn (£778m) to beat analyst forecasts, despite the global financial crisis and downturn in the advertising market. The internet giant reported its results for the third quarter, which ended September 1, today (October 17).

Its revenue for the quarter, including commissions to affiliated advertisers, rose 31% to $5.54bn (3.19bn). Paid clicks – the measure of how often Google gets paid for ads it runs alongside web search results - rose 18% compared to the same period in 2007.

Canaccord Adams analyst Colin Gillis says: "Even in a downmarket, advertisers are going to be seeking customers. These results separate out Google from the eBays and the Yahoos."

Google chief executive Eric Schmidt says the economic downturn has created "uncharted territory". He adds: "We are very realistic about the macro environment, but we are optimistic about Google's future."

Schmidt says that web traffic and revenue growth were strong in all major parts of the world and searches were up in every industry.

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Behold! The Recession-Proof Google

Date:  16th October 2008

Hail Google! Wall Street is crumbling and traditional media companies are struggling to survive. But Internet bellwether Google — the king of search — beat analysts' expectations today and posted solid earnings: $1.35 billion in revenue for the quarter. That's up 31% from a year ago.

You can get all the details here. But the bottom line is very strong — and very clearly shows how solid, diversified and growing Google is. And what about the future in this cataclysm of an economy? While CEO Eric Schmidt was characteristically measured and calm ("While we are realistic about the poor state of the global economy, we will continue to manage Google for the long term...") it looks like Google will emerge from Great Depression 2.0 bigger and stronger than ever.

Spend some time with the balance sheet, and listen to Google's top execs — who jackjawed over an hour with analysts after the market closed today — and you can't help being a believer. If any company other than Budweiser is recession/depression proof, this could be it.

That's because it starts with consumers, who will continue to use Google more than ever. In tough times, everyone looks for value, and what's more valuable than something you get for nothing? Google's search, maps, email and documents improve at an astounding rate, and the company continues to invest in making those products ever better, drawing in more users at home and work.

As the mobile revolution continues — and it will continue since mobile telephones are almost as likely to survive home-budget cuts as cable TV — who stands to gain more market share than Google? Mobile search queries are just starting to explode, said Schmidt. Though he declined to give numbers, he said: "the compound growth rate is one of the fastest-growing things in the company." That's a pretty big statement at Google. And remember that we're at the earliest stages of this particular revolution. The first Google phone is just coming to market after all.

On the advertising front, the company continues to win over the hearts and minds of advertisers and users. While AdWords (in which relevant ads are matched to search queries) was the company's first eureka moment, it is expanding in many other directions, from trying to monetize videos on YouTube, to a new, roll-your-own display ad program that launched today. "We see a lot of opportunities in display," said co-founder Sergey Brin, who cautioned that, as with many things Google, the program might take some time to find its way. "Let's not forget that when we first got started on AdWords it took us a number of years for it to even catch up with the big numbers of display advertising." But he vowed that the display ad program, as it matured, would scientifically target the right ad to the right user at the right time, giving advertisers valuable data about what was working, and what wasn't.

Hal Varian, Google's chief economist, said that the current economic climate, rather than hurting Google, could well help it. "When there is a recessionary period, people are counting their pennies and looking for bargains," he said, noting that at Google, this is known as "the Wal-Mart Effect." He added: "We think this kind of effect could actually work to Google's benefit." Indeed, it could work better at Google, where everything is free, than at Wal-Mart.

By Josh Quittner / San Francisco

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Eric Schmidt – Forbes 400

Date:  1st October 2008

#52 Eric Schmidt
Net Worth: $4.0 billion
Source: Technology, Google

Self made
Age: 50
Marital Status: Married, 2 children
Hometown: Atherton, CA

Education: Princeton University, Bachelor of Arts / Science
University of California Berkeley, Doctorate

Electrical engineering degree from Princeton, Ph.D. from UC, Berkeley, began career in software at Bell Labs and Xerox PARC. Began at pre-IPO Sun Microsystems in 1983, rising to chief technology officer; led development of its Java technology. Briefly ran flailing software outfit Novell, but found perfect match in 2001 when Google founders Larry Page and Sergey Brin (see both) appointed him chief executive. Introduced new services (Gmail, Google Talk), taking on Microsoft with desktop search function.

Distribution of the Forbes 400 by U.S. State

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