Google (NASDAQ:GOOG) was anticipated to save the tech sector from a serious selloff this week. Now, they are adding to the chaos with a surprise shakeup in the C-Suite:
- Starting from April 4, Larry Page, Google Co-Founder, will take charge of Google’s day-to-day operations as Chief Executive Officer.
- Eric Schmidt will assume the role of Executive Chairman, focusing externally on deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership–all of which are increasingly important given Google’s global reach. Internally, he will continue to act as an advisor to Larry and Sergey.
- Sergey Brin, Google Co-Founder, will devote his energy to strategic projects, in particular working on new products.
Google CEO Eric Schmidt said:
“We’ve been talking about how best to simplify our management structure and speed up decision making for a long time. By clarifying our individual roles we’ll create clearer responsibility and accountability at the top of the company. In my clear opinion, Larry is ready to lead and I’m excited about working with both him and Sergey for a long time to come.”
Shares are up 1.8%, but totally erratic.
What do we think?
Google crushed Wall Street expectations. Revenues came in at $6.37 billion versus Wall Street expectations for $6.06 billion. Net income came in at $8.75 a share versus expectations for $8.09 a share. One area for concern was operating income of $2.85 billion versus $3.31 billion expected.
Google delivered on its most highly watched divisions:
Online Ads: Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 18% over the fourth quarter of 2009 and increased approximately 11% over the third quarter of 2010. Ad quality improved drastically.
Search: Google.com grew 28% year-over-year.
Android: The Android mobile phone division is now being activated on 300,000 phones a day. The division had a 10x increase in mobile searches. That’s very good news.
Youtube: Details on earnings call at 4:30PM EST — refresh this page for our live update.
Google TV: Details on earnings call at 4:30PM EST — refresh this page for our live update.
Google in China (NYSE:FXI): Details on earnings call at 4:30PM EST — refresh this page for our live update.
What are the risks going forward?
The big risk at Google is how long, if ever, the company will finally produce another revenue generating asset like AdSense. The bad news is nothing has emerged even after years of business development. The good news is Android has a very high probability of becoming the Windows (NASDAQ:MSFT) of mobile.
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