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Google's Q4 earnings announced

     
9:29 pm on Jan 31, 2007 (gmt 0)

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Q4 '06 #'s below, with sequential growth in () -

$3.21B Total Revenue (+19.3% sequentially)
$976M Traffic Acquisition Costs (+18.3%)
$1.006B Operating Income (+8.1%, Less R&D, Selling, G&A, etc)
$1.03B Net income (+40.5% GAAP, +22.8% Non-GAAP)
$3.29 EPS (+39.4% sequentially)
G.com = $1.98B, or 62% of total (+22%)
Network = $1.2B, or **37%** of total (+16%)
Int'l = 44%
Clicks = +22% vs Q3.

10:12 pm on Jan 31, 2007 (gmt 0)

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Web search leader Google Inc. said on Wednesday its quarterly profit rose as its ability to capitalise on Web advertising gained momentum against rivals such as Yahoo Inc. and Microsoft Corp.

Google shares fell more than 3 percent to $484.83 after the company reported total revenue growth that was largely in line with Wall Street expectations, despite some investor hopes of an upside surprise.

Net income for the fourth quarter grew to $1.03 billion (524 million pounds), or $3.29 per share, compared with $372.2 million, or $1.22 per share in the year-earlier quarter.

Gross revenue rose 67 percent to $3.21 billion. The figure includes $976 million in traffic acquisition costs (TAC), the financial cut that affiliated Web sites receive for featuring Google advertising.

Google's Q4 earnings announced [today.reuters.co.uk]

10:26 pm on Jan 31, 2007 (gmt 0)

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The figure includes $976 million in traffic acquisition costs (TAC), the financial cut that affiliated Web sites receive for featuring Google advertising.

Does that mean there were 976 million Firefox-with-Google-toolbar installs? ;-)

10:32 pm on Jan 31, 2007 (gmt 0)

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Exactly why I don't invest in the stock market any more. Google makes a killing, and the stock takes a dive.
10:46 pm on Jan 31, 2007 (gmt 0)

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stock takes a dive

huh? looks like it is only down about 2% in after hour trading. not sure 2% qualifies as a dive.
10:48 pm on Jan 31, 2007 (gmt 0)

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It had fallen 3 points... which is big for any company... especially after good news... =)

2 points is about 3 billions dollars off the top of their market cap...

[edited by: maximillianos at 10:51 pm (utc) on Jan. 31, 2007]

10:49 pm on Jan 31, 2007 (gmt 0)

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always sell on the news, the share will go up again.
10:54 pm on Jan 31, 2007 (gmt 0)

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>> Google makes a killing, and the stock takes a dive

To support its current PE (>62), google have to continuously beat the estimations by a large margin not just meet the estimations.

11:27 pm on Jan 31, 2007 (gmt 0)

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>> Exactly why I don't invest in the stock market any more. Google makes a killing, and the stock takes a dive.

Ummmm...not exactly a killing, considering their stock price. Goog made $1 Billion in profit but their market cap is $153 Billion.

11:39 pm on Jan 31, 2007 (gmt 0)

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...The figure includes $976 million in traffic acquisition costs (TAC), the financial cut that affiliated Web sites receive for featuring Google advertising....

Does that mean there were 976 million Firefox-with-Google-toolbar installs? ;-)

I think this is the payout to AdSense content publishers (guessing!). Can someone confirm this?

11:46 pm on Jan 31, 2007 (gmt 0)

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I think that is right Physics... not too shabby for us Adsensers!
11:58 pm on Jan 31, 2007 (gmt 0)

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stock takes a dive.

GOOG was up $7.18 today, then down $6.50-ish in after hours... meaning the stock still made a gain, as yet, on the news.

11:59 pm on Jan 31, 2007 (gmt 0)

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I think this is the payout to AdSense content publishers (guessing!). Can someone confirm this?

AdSense accounted for 916 of the 976 number.

JAG

12:07 am on Feb 1, 2007 (gmt 0)

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Does anyone know when the 4th quarter trading period finished? Is it in line with the year end 31/12 or is googles financial year end to a different date?

It will be interesting what the first quarter results will be based on the less relevent serps they have been rolling out since end of November - maybe Yahoo will pull some back with its improving serps.

Google have made some drastic changes to their serps over the last few months and it will take a while for google to notice if they lose any ground to Yahoo as a result of the changes.

The next set of results could prove interesting

12:15 am on Feb 1, 2007 (gmt 0)

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Forget question - i just read routers report

Financial year end is in line with the year end. So we wont know the effects of the serps changes rolled out until end of the first quarter 31st March.

12:54 am on Feb 1, 2007 (gmt 0)

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Wall street really expects too much of Google. Google should be way past this 500 mark.
1:00 am on Feb 1, 2007 (gmt 0)

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Physics and Max,

The TAC number isn't just AdSense content publishers by any means. The majority of that number is payments Google makes to AOL, Ask.com and now MySpace (News Corp). I don't know exactly, but I'd guess the TAC that is for AdSense contextual publishers specifically is <US$150M.

-Shorebreak

3:05 am on Feb 1, 2007 (gmt 0)

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Thanks Shorebreak!
3:49 am on Feb 1, 2007 (gmt 0)

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Either way, that's a lot of freakin' money!
9:39 am on Feb 1, 2007 (gmt 0)

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To support its current PE (>62), google have to continuously beat the estimations by a large margin not just meet the estimations.

If they had not 'tried hard' [webmasterworld.com], they likely wouldn't even have met the estimations (let alone "beat the estimations by a large margin").

11:45 am on Feb 1, 2007 (gmt 0)

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>>> $1.006B Operating Income (+8.1%, Less R&D, Selling, G&A, etc)
$1.03B Net income (+40.5% GAAP, +22.8% Non-GAAP)

Google doesn't pay taxes? How can op income be equal to net income?

By the way, I am not very familiar with US accounting and taxation for corporates.

5:20 pm on Feb 1, 2007 (gmt 0)

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I'm not sure which of the items you mention is wrong, but taxes paid were about 24% in Q4 and about 26% for the year.
9:40 pm on Feb 1, 2007 (gmt 0)

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Expectations were definitely sky-high. The stock is still reasonably priced, considering the growth rates.

Google's forward P/E (1 yr) - 34
Yahoo's forward P/E (1 yr) - 38

Google's profits are growing exponentially, while Yahoo's have been almost stagnant. That's a simplistic view, there are lots of other factors involved.

9:47 pm on Feb 1, 2007 (gmt 0)

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forward PE is junk. It's someone guessing what will happen a year from now. I'll skip, especially since there seems to be no penalty for analysts guessing wrong.
2:58 pm on Feb 2, 2007 (gmt 0)

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To support its current PE (>62), google have to continuously beat the estimations by a large margin not just meet the estimations.

A cool $billion per qtr will change this ratio dramatically...if the current stock price remains stagnant. If this keeps up Google will be flirting with $1000 per share in a within a few quarters.

6:08 pm on Feb 11, 2007 (gmt 0)

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