Amr Awadallah Blog

My estimate for their sequential revenue increase was 15%, they came in at 17%. That extra 2% is an additional $50M (they did $2.25B instead of the predicted $2.2B), so where did this $50M come from ?

If you dig deeper in their results, the Google O&O revenue (owned and operated, i.e. their own sites), you will see that it was up 18%, as opposed to 16% for the Google Network revenues (these are mainly revenues from search partners like AOL, Earthlink, Ask, but it also includes a small fraction from Adsense content ads).

So, one of two things happened, either (1) Google gained more marketshare than Comscore estimates (Comscore estimated 15%, hence my estimate), or their cost-per-click was higher in Q1 than in Q4. The $50M possibly came from both of the above, since (1) Eric Schmidt that they are seeing marketshare increase, and (2) I heard from many sources that Google has been increasing the minimum bid for many of its keywords, which forces advertisers to pay higher (though this might also lead to lower coverage and CTR if the advertiser does not increase their bid and drops out).

As for my prediction of the Google stock falling, I was obviously off there 🙂 (more like 🙁 ), the after hours are currently showing a $33 increase, and I think that is due to profits rather than revenues. Google’s costs did not go up as high as expected in Q1, that allowed them to get a $2.29 EPS which is significantly above the $1.98 predicted by analysts.

— amr

In a previous blog entry I commented about how my blog was coming up as the first result when you search for “Google Hatred” on google.com.

Well, I was now knocked out of the first position (I am second now), and to my surprise the 1st position now goes to Google Finance, makes you wonder whether google is boosting the relevance for their own content.

Here is a screenshot:

Another interesting query from my http referrer logs is “Google 2006 Q1 earnings“, I show up as 3rd and 4th results for that query (SearchEngineWatch beats me for top two spots, though I claim my entry is more relevant 😉 ).

— amr

After the miss from last quarter, all the analysts cut their sequential revenue growth estimates from the 25 to 30% range for 2005-Q4, to just 9 to 15% range for 2006-Q1. I think Google will come in within that range, however, I predict that the stock will still drop as this is what folks expected, and I do not see them beating it by much (GOOG is at $409.66 as of today’s close). Furthermore, I have a gut feeling that Google will surprise us with some large increase in costs, specially for sales and marketing.

Next week should be super fun with both Yahoo (4/18) and Google (4/20) releasing earnings.

Cheers,

— amr