Commentaries

Google’s golden one-trick pony

Google chief executive Eric Schmidt declared “the worst of the recession is over” while unveiling third quarter results. Certainly Google’s recession doesn’t look like anyone else’s.

Revenues of $5.945 billion were up 7 percent from a year ago  and up 8 percent over the previous quarter, after  two flat quarters. Earnings of $5.89 per share were comfortably ahead of the consensus estimate of $5.32. Cost per click, the average amount advertisers pay, was up 5 percent from the second quarter, although still down on the previous year. And Google gushes money — the third quarter had $2.5 billion in free cash flow.

There are, however, factors that give pause. Part of Google’s strong recovery came from discipline. Capital expenditure was way down ($186 million compared with $452 million year on year), contractors in the workforce were largely eliminated, staff numbers were cut, and even the famed free food at the Googleplex was trimmed. Schmidt suggested that some of those constraints will be loosened. Capital expenditure will rise – the third quarter was already ahead of the second – and Google is hiring again.

Schmidt also talked about making strategic acquisitions, although these are likely to be small. When Google was growing by double figures each quarter, discipline was an afterthought. The company has shown it can clamp down, but there is some risk that it will return to previous profligacy.

from MediaFile:

Most teens find “tweeting” pointless — Morgan Stanley

Eric Auchard

Jul 13, 2009 09:49 UTC

Taking a break from flogging the latest tired media business model, Morgan Stanley published a short report on Friday entitled, "How Teenagers Consume Media" by 15-year-old summer intern Matthew Robson that offers a frank discussion of what young digital media consumers are up to.  The FT has highlighted it on its front page, perhaps as an antidote to wall-to-wall coverage of the annual Sun Valley media moguls conference in recent days.

The most memorable moment in the report is its discussion of the irrelevancy of Twitter to teenagers: