Jul 18, 2008

Hal Varian Discusses Google's Business Model and Earnings

From The Finincial Times Tech Blog
July 18, 2008

Google: what earnings shortfall?
By Richard Waters

Wall Street’s trigger finger always starts to twitch when Google’s earnings roll around. In the most recent quarters the shares have notched up one day movements of - 9 per cent and + 20 per cent the day after earnings reports. That’s made it a bumpy ride for investors this year.

So it’s no surprise that the stock dropped 8 per cent in after-market trading on Thursday after Google failed to meet the Street’s second quarter earnings forecasts (of course, Google steadfastly refuses to dignify such forecasts by issuing guidance of its own.)

When I got a brief word with CEO Eric Schmidt just now, he pretty much brushed off this discrepancy as a failure by Wall Street analysts to take account of Google’s lower cash balances.....

Was there any other new information to justify a sharp drop in Google’s shares? Hardly. The company wheeled out Hal Varian (the ... UC Berkeley economist known to students across the US as the author of the seminal university textbook on the subject) to explain that the company’s click-based advertising was holding up well even in the most economically sensitive sectors, with the exception of real estate....


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October 4, 2016