Alls well in Google Land – Schmidt out, Page In and Profits Still up

by Peter Young on January 20, 2011 · 0 comments

Today has seen an interesting day in Google Land. Fantastic Q4 figures, and Eric Schmidt stepping down as CEO – things couldn’t have gone better. In all seriousness, the movements at the top could signal some interesting times ahead for Google, with co-founder Larry Page now at the helm. Eric Schmidt will assume the role of Executive Chairman focussing on deals, partnerships and other high commercial and strategic functions at the top.

Perhaps interestingly this comes off the back off some significant commercials announced from Google, namely

  • Google announced revenues up 26% to $8.44 billion for the quarter ended December 31, 2010 (in comparison to those of December 2009)
  • GAAP operating income in the fourth quarter of 2010 was $2.98 billion, or 35% of revenues (compared to operating income of $2.48 billion, or 37% of revenues for Q4 2009). Non-GAAP operating income in the fourth quarter of 2010 was $3.38 billion, or 40% of revenues (compared against $2.76 billion, or 41% of revenues, in Q4 2009)
  • Paid Clicks (including adsense clicks) increased approximately 18% over the fourth quarter of 2010 and 11% over the third quarter of 2010.
  • Cost-Per-Click Average cost-per-click increased approximately 5% over the fourth quarter of 2009 and increased approximately 4% over the third quarter of 2010.
  • Cash As of December 31, 2010, cash, cash equivalents, and marketable securities were $35.0 billion (Plenty of cash for acquisitions)

All this would suggest a very strong position position for Google however it will be interesting to see how Google goes under the leadership of Larry Page. Certainly the monopoly of Google shows no sign of abating, and one would suggest 2011 should still see some significant growth for Google – particularly given the opportunity for expansion into new markets and opportunities.

However, increasing cost per clicks may persuade advertisers to look at other channels to help increase efficiencies particularly channels such as SEO, Display Retargeting and Exchange/Social Media Targeting.

As such I don’t think Google can rest on their laurels, there is certainly more work to be done if they are to remain at the top and build on these successes.

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