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Tech Check
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Google's [GOOG
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] fourth quarter report knocked the cover off the ball, and in every key metric, this company proves the points that I brought up in my earnings preview on this company earlier today: It is the only game in town and it continues to widen the gap between itself and Microsoft [MSFT
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] , Yahoo[YHOO
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] and any other company out there trying to compete.
More importantly, a stock option repricing program announced today as well could open the floodgates here in Silicon Valley for so many other companies feeling the same pain. More on that in a second.
Google reported $5.10 a share, beating estimates by 15 cents, on $4.22 billion in revenue (excluding Traffic Acquisition Costs), which was also ahead of the $4.12 billion anticipated by analysts on Wall Street.
But when you dig a little deeper into some of the key metrics by which the experts measure the true health and welfare of this company, the Google story gets even better.
The company reported $2.15 billion in non-GAAP operating income, ahead of the $2.04 billion expected; Google-owned sites generated $3.81 billion in revenue, ahead of the $3.7 billion that some expected; there was some perceived weakness in Google's network revenue, with the company coming in at $1.69 billion versus the $1.71 billion that some expected. One of the best measures of the company's success can be found in so-called Paid Click growth. Mark Mahaney at Citigroup was looking for a 17 percent increase, but Google reported a robust 18 percent jump instead.
Every quarter, I also take a look at the hiring line at this company, especially since Google has added over 15,000 employees over the past few years. Analysts use this metric to see whether the company is controlling expenses by keeping headcount low and this line on the earnings report has generated lots of interest in quarters past. And today is no different. Mahaney for one was looking for Google to have added 500 or fewer new workers, especially since the company announced it was laying off 100 recruiters recently. Google wowed Wall Street by reporting that headcount only grew by 99 employees, the lowest employment addition since the company went public.
Maybe the most interesting tidbit in the release is that Google appears to be embarking on a new "share the wealth" campaign by re-pricing stock options for employees. The company announced a new Employee Stock Option Exchange whereby workers will be able to exchange, on a one-for-one basis, existing options for new options based on the strike price of March 2, 2009. With Google hiring those 15,000 workers over the past three years, and shares trading at a 3-year low, it stands to reason that thousands of Google workers are "under water" with a big chunk of their compensation packages. This is something about which I have written before, and you have to wonder whether this will open the door to so many other companies (maybe Apple? Intel? Research in Motion?) who are in the same boat.
Meantime, this was a solid Google report and its after-market stock performance is reflecting it.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes