Google shores up cash through pinching pennies

MarketWatch First Take

Oct. 15, 2009, 5:06 p.m. EDT · Recommend · Post:
Google, the penny pincher emerges
Commentary: Cash pile building up, are deals far behind?


Google shores up cash through pinching pennies
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By MarketWatch

SAN FRANCISCO (MarketWatch) -- Google Inc. made investors happy on Thursday with its better-than-expected earnings and revenue, but one of the most striking things about its results was evidence of recent penny pinching at the Internet search giant.

Apparently, Google /quotes/comstock/15*!goog/quotes/nls/goog (GOOG 546.00, +16.09, +3.04%) executives are finally listening to Wall Street, which had been concerned about its free-spending ways. In the quarter, Google said its operating expenses of $1.64 billion were 28% of revenue, down from the year-ago operating expense level of 31% of revenue, or $1.72 billion. See full story.

The company also said its total worldwide workforce shrunk by 121 people in the quarter. It employed 19,665 full-time employees at the end of September, down from 19,786 in the second quarter. Google's over exuberant hiring had been sticking in Wall Street's craw.

As it saves more money from operations, its cash pile keeps growing as its business throws off big bundles of green. Google ended the quarter with nearly $22 billion in cash and marketable securities, up from $19.3 billion in the prior quarter. With a cash pile growing at yet another tech giant, could Google start looking around for some other big acquisitions too?

If so, let's hope it finds a revenue-generating company that is more profitable than YouTube.

- Therese Poletti

from MarketWatch

Google Plans To Invest “Heavily;” To Step Up Hiring; Seeking Acquisitions “Large and Small”

* IBM Q3 Revs, EPS Edge Estimates; ‘09 Forecast Raised; Stock Falls
* Advanced Micro Devices Q3 Tops Estimates



By Eric Savitz

Google (GOOG) CEO Eric Schmidt told investors in a Q3 earnings conference call this afternoon that “the worst of the recession is behind us,” and that the company now has the business confidence to invest “heavily” in the next phase of innovation.

Schmidt said the company will invest both in people - he said they are stepping up hiring - and in innovation.

Schmidt also said the company will focus more on strategic deals and acquisitions. He says Google is “open for business to make strategic acquisitions both large and small.”

Get ready to see a lot of Google will acquire FILL IN THE BLANK rumors.

Schmidt said they will focus mostly on small acquisitions, with larger deals every year or two.

Asked about possible stock repurchases, he said that they would not rule it out, but advised investors not to expect that to happen any time soon.

GOOG this afternoon is up $10.59, or 2%, to $540.50.

from Barron's

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Comment: Time for a letter to Eric Schmidt, I think (CC'd to Chandratillake and Mike Lynch, of course). If Chandratillake cannot or will not deliver value to Blinkx shareholders after two-and-a-half years of waiting, let's get this company flipped and sold to someone else...

One example: shareholders were told before last Christmas that Transaction Hijacking (TH) was ready to go - yet at the AGM last month Chandratillake is only now talking about setting up a server farm in Nevada to facilitate TH? What the f**k has he been DOING for the past 9 months?

* Where's the iPhone app?

* Where's the Facebook app?

* If Blinkx has such a bright future, why are NONE of the mgmt team buying shares? There may be a lot of deals going on behind the scenes (or at least shareholders hope so), but is there not ONE day of the year when the management team could collectively buy shares to demonstrate their faith in this company's future? Not ONE?

As someone once said: Talk - Action = Zero.

Which is about all that Blinxk shareholders have got so far...

But of course Chandratillake doesn't care about shareholder value, does he, because he's never put his hand in his pocket to buy a single share, has he?

If the news at the interims isn't good, I'll be writing to the large institutional holders suggesting that they support a call for an EGM to remove Chandratillake and put in place a CEO who can deliver, who can obsessively focus on shareholder value. I suspect that unless the Blinkx share price improves - and quickly - there will be many sympathetic ears to this call. These are people who bought at 45p two-and-a-half years ago, and now see their investment still worth less than half, despite all the 'progress' made since: most of which progress is, in fact, still largely speculation and rumour by delusionally optimistic shareholders. BobVila.com? And Blinkx seriously thought that was worth the cost of an RNS? Per-leeeeeeze...! If I needed any more proof...

Call it a comeback? Google earnings due

by Tom Krazit


With the online ad business appearing to have collected itself at the bottom of the ravine, all eyes will be on Google's earnings report Thursday to see if it has figured out where the path back to the top starts.

Investors are feeling good about Google in the run-up to Thursday's third-quarter earnings conference call, sending the stock to a 52-week high on Tuesday at $527.46 before it settled back down to $526.11 at the close of trading. Five prominent financial analysts raised their expectations for Google's stock Monday amid a collective feeling that advertisers have started to finally increase their spending after sitting on their wallets for about a year.

Last week Google CEO Eric Schmidt said that not only are things picking up in the U.S., but Europe has started to get its groove back ahead of the expected timeline. Google sales representatives gathered in New York last week were said to be "very, very positive."

The other good thing for Google is that even if search growth in the U.S. continues to creep along--up just 3 percent from July to August--the worldwide growth in search queries is quite strong, giving the company some room to grow revenue. Revenue from outside the U.S. made up 53 percent of the company's second-quarter revenue, although competition is tougher for Google outside its home country, especially in fast-growing China.

Citigroup's Mark Mahaney, speaking to MarketWatch earlier this week, described search advertising as one of the more resilient forms of advertising during a slump, and as such is also one of the first places where companies will want to put their money as budgets loosen. That means Google's results--if the optimists win the day--will be held up as the start of the online advertising recovery as well as a sign that the rest of the industry still has a ways to go.

Longer term, however, Google needs to make something else pay off beyond its search juggernaut if it wants to sustain long-term growth, Mahaney said. Google has made some progress in the last quarter on some of those areas, launching a revamped display ad exchange (although that came too late in the quarter to have much of an effect), signing deals with several partners for Android phones, and increasing the number of ads and content partnerships shown on YouTube.

from CNet

BBC's iPlayer Set to Go Global

"The hugely successful online video-streaming service from Britain's public broadcaster could soon be available to viewers in the U.S. and elsewhere"

from BusinessWeek

Let's hope Blinkx are involved somewhere somehow, eh?

England Vs Ukraine online: watershed moment or own goal?

Britain's largest ever live pay-to-view internet event happened this weekend, with England Vs Ukraine only available to watch online and in selected Odeon cinemas.

The outcome of the match, which England eventually went on to lose 1-0, was not significant to next year's World Cup for England at least, the way it was shown could be significant to how future football games are seen.

Making it web-only showed that more professional games may not be played out in front of television screens but computer ones.

Pioneering broadcast

Industry opinion is divided on just how significant the web event was. Unsurprisingly, the most vocal about its success were the providers of the internet stream – media group Perform – who celebrated the fact that there were "no technical issues" and called the game a "pioneering broadcast".

While exact figures are hard to come by, Perform believes around 500,000 people watched the match – including those who watched it through the British Forces Broadcasting Service (BFBS), who screened the game free for troops.

Compare this with the 8 million plus people who watched England's qualifier against Croatia, which was shown back in September on ITV, and there is a significant drop-off in viewing figures.

It has to be noted that the game against Croatia was a crucial one, and was shown on ITV for free, but it does make for interesting comparison if we are to believe that Saturday's game finally made IPTV mainstream in the UK.

Watershed moment?

No matter what the size of viewing audience, Suranga Chandratillake, CEO and founder of blinkx, believes the online match held great significance.

"The England Vs the Ukraine match this weekend was a watershed moment for online television," he explained.

"Where we used to turn to the Web for 10 second clips of dramatic chipmunks and skateboarding dogs, half a million people tuned in on Saturday to watch the England team compete in a premier sporting event. It was a glimpse into the future of TV, heralding profound changes in the media ecosystem of broadcasters, content owners and audiences."

Alex Lane, Editor of What Satellite and Digital TV, isn't so sure, telling TechRadar: "Less than half a million watching an England World Cup qualifier – even if it's not a crucial one – seems like an own goal.

"It just goes to show that money is far more important to the rights holders than the fans or the sport itself. It would have been a watershed moment if they'd sold it to platforms and venues that football fans want to use, like Xbox, PlayStation and pubs."

TV on steroids

Regardless of the games impact, Blinkx's Chandratillake feels this is just the beginning for online football watching, believing that there's technology to come which will make viewing matches on the web much more enjoyable:

"Broadcasting the match over the internet was just the first step – imagine fusing that game with the interactive power of the web so that you had a top notch TV experience that was actually interactive and linked to the universe of information on the Web?"

He continues: "With a single click, you could get Wayne Rooney's history and stats, review key plays, select the commentator of your choice, and interact live with other fans all over the world. Whether you watch it on your laptop, or on the flat screen in your living room, this is the future – and it's TV on steroids."

The future of IPTV on the web may well be TV on steroids, but the present situation is a little different.

from TechRadar

Blinkx Aims to Change Online Video World

Blinkx aims to take on YouTube, Hulu and Veoh.

Some may have never heard of the San Francisco-based company, but in just a few short years it has become the single biggest search engine for online video. In August, Blinkx joined Yahoo!, CNN, YouTube and others on Nielsen VideoCensus’ top 10 list of most popular online video sites.

“Most video sites on the Web aren’t search engines,” said company founder and CEO Suranga Chandratillake. “You’re only going to get results on those sites. We’re the starting point for everyone else’s content.

“The analogy we use is that we’re the remote control for Web video.”

Since it launched in 2004, Blinkx has garnered more than 530 media partners, from the big (ESPN) to the small (HealthGuru.com). They include national and international broadcasters, private video libraries and commercial media companies. Thanks to those partnerships, and unique search technology, Blinkx offers one-stop search access to more than 35 million hours of online video...

from Home Media magazine

UGC business model