FROM BRIEFING:
During the call, GOOG says that it is seeing many signs that the economy is strengthening and now has the confidence to invest heavily in growth areas. This will include headcount and acquisitions. GOOG plans on adding employees mostly in the engineering and sales areas. For acquisitions, the company will look at both smaller and larger acquisitions. Smaller, technology-based acquisitions could happen as frequently as on a monthly basis. The company says a larger acquisition would have to substantially increase its user base, and would be fairly rare. GOOG says they are very pleased with YouTube's performance, saying profitability is nearing. The company says it is continually adding key advertiser relationships for YouTube deals with large customers like Hewlett-Packard (HPQ) and McDonalds (MCD). Company says Android ramp is going well, with the platform in 12 devices and with more than 30 carriers. Chrome -- GOOG's new operating system -- is progressing well, and GOOG states that it will significantly increase the speed of web-based applications. In terms of geographic performance, company says China and Brazil continue their strength, while areas in Europe, such as Spain, have shown renewed strength.
One of my favorite parts of the Google conference call was when CEO Schmidt said that margins don't matter. He said that GOOG does not have a margin target. The collective gasp could be heard over the mute buttons on the web conference call.
You can't eat percentages. Or what would happen if a basketball team maximized shooting percentage instead of points - right, they would stop when they hit their first shot, but would lose every game. Obsession about margins and growth for growth's sake causes many unintended consequences and mis-aligned behaviors. In the after-call GOOG just got another question about percentages and margins - these analysts are ridiculous.
GOOG is a well-aligned company.
BERK
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