Amr Awadallah Blog

Well I did say I am not confident enough to put my money on it ;), 10% sequential revenue growth is insane, I have to say that I am dumbfounded (however, why did they say 10% sequential revenue growth when their Q2 revenue was $2.46B and Q3 is $2.69B, isn’t that 9%?).

Either Comscore is really off (and Google gained a ton of search pageviews in Q3), or Google raised their CTR/CPCs way way up, or both. They did say this in their presentation “Monetization was the primary driver of revenue growth; traffic gains also contributed meaningfully”.

The increase is mainly coming from Google Sites at 14% sequential increase, the Google network (which includes both search on other sites like AOL, and adsense ads on other sites) was up just 4%.

Also international was very strong at around 12.72% (after you factor out the currency rate benefits).

This is indeed amazing performance for a slow summer quarter.

-– amr

Analysts are expecting something in the range of 6 to 9% sequential quarterly revenue growth, not gonna happen, well barely, here is why:

Comscore is saying that Google organic search pageview volume is flat to down from Q2 to Q3.

Google did not launch any significant revenue boosters. I previously commented on the main changes I saw, and the only one that might boost revenue is the SERP change for domain searches, but that change happened during the last month of the quarter and I do not expect it to make more than a couple of %. The other two changes were negative, not positive, as far as revenue is concerned (they were positive for user experience)

Some folks pointed out to another change that Google did in July, they changed their quality scoring formula and hence essentially started charging more, and increased the minimum bid price for many keywords. These kind of changes lead to immediate revenue boost, but then advertisers quickly adjust their bids to maintain their ROI, or withdraw from bidding on that term completely. Though I am not sure, I think that Google did lose a significant number of listings (and hence coverage and depth) due to this change.

That said, it does also seem that Google increased the number of pages for which they show three ads above the search results, that certainly leads to more money.

I predict that Google will come in at the low side of estimates, if not miss them completely (i.e. 5% or less). However, I am not confident enough to bet my money on it, as comscore data was flaky last quarter (they predicted 20% sequential organic search volume increase for Google’s Q2 over Q1).

— amr

http://soapbox.msn.com/video.aspx?vid=1f01fb3d-e43c-4760-abd0-1b88e7aa2a4b

(if you are using a blog reader, some readers do not support embedded video players, so you need to come to my blog page to see the video)

Chad did sound high in the original video, or at least very drunk, specially to come up with the “Two Kings” comment 😉

You can see the original video here:

http://www.youtube.com/watch?v=QCVxQ_3Ejkg

— amr

PS: Google is going to “bomb” next week.