Google Says Worst of Recession Is Over
October 16, 2009 by Pablo Palatnik
The WallStreetJournal reports that Google has posted third-quarter profit of $1.64 billion, up from $1.29 billion a year ago, while revenue climbed 7% to $5.94 billion. While many small to large businesses are cutting advertising and marketing budgets, many also decided not to cut, but shift budgets to online marketing as it is becoming the most effective way to reach your audience.
Running a medium sized e-commerce company myself, I believe the worse may not be behind, and I think we’re still in it deep, with recovery in sight but at a very slow pace. Nevertheless, the holidays, that includes late OCT, NOV, and DEC are three months which differ from the rest of the year when it comes to sales. These are the 3 months where holiday season means spending, all the way from the person making $10k a year to millions, holiday season = spending season.
The article in the WSJ points out relevant and important quotes from Eric Schmidt, CEO of Google and they are listed here as you can also see it by clicking on the link above to the original article (recorded from a call to Google share holders):
4:35: “While there’s obviously a lot of uncertainty about the pace of the economic recovery, we believe the worst of the recession is behind us,” Schmidt says.
4:37: Says “we want to really get to the perfect search engine” and that many advertisers would like to spend more with Google if the company’s product allow them to do that.
4:44: Brazil was a standout in Latin America, Arora says. We’re beginning to see signs of recovery in Europe and Africa, particularly Spain. In Asia, China performed strongly as an emerging market.
4:46: Looking at the display-advertising business, those have also shown strong results, he says. On YouTube, new advertisers and partners are helping with monetization efforts. Ninety percent of the top 50 advertisers have run YouTube campaigns with successful results — recent examples include McDonald’s and Hewlett-Packard.
4:53: Display advertising “still a highly inefficient industry,” Rosenberg says. About a quarter of publisher space goes unused.
5:03: Ross Sandler from RBC asks if Google is seeing higher conversion rates. Arora says “we don’t comment on precise metrics and conversion rates,” but says on the consumer side, “we’re seeing rational behavior.” The rates seem to be holding up.
5:07: What verticals, i.e., autos, saw the biggest spending increases from the previous quarter, Justin Post from Merrill Lynch asks. Arora says autos was most-improved in the U.S., thanks to Cash for Clunkers, and retail gained from back-to-school sales. Finance “continues to be a tough vertical,” esp. when comparing to the year-earlier period. Some pockets, however, such as health insurance or insurance overall, are more positive.
5:28: Schmidt wraps up the call, saying, “I hope it’s clear that we’re very happy with the quarter. We believe we now have the confidence in our underlying business and the business trends to begin to get back to do the kinds of things that we really see as our mission, which is to make the world an information-rich place, to build some of these new businesses and really serve our customers very well.”
