2010 was a year of Facebook and Google (News - Alert) riddled news, and a showcase of that news covered the relationship between the two. As I wrote in November 2010, Google was promising websites that as long as other social networking sites are willing to share user data, Google is willing to provide access to its user data. Facebook (News - Alert), however, not following Google’s code of reciprocity, had been given limited access to Gmail user data. Those newly registered to the popular social networking site no longer have the ability to tap into their Gmail contacts in order to expand upon their network of friends. Gartner (News - Alert) analyst, Ray Valdes, told Reuters that he believes Google's decision and policy change is tied to its business ambitions.
It’s time to find out if Google’s numerous ambitions, whether in a social networking standpoint or a search engine standpoint, paid off. Google this afternoon reported its earnings for the fourth quarter (4Q) of 2010 (Oct. – Dec.).
As was expected by analysts, it was a strong quarter, originally estimating around $6.06 billion, with an actual reported 4Q revenue of $6.40 billion. Social networking’s impact may have been trumped by e-commerce. Lots of online shopping means more searches for products, more advertisement clickthroughs, and higher rates for those advertisements. With the 2010 holiday season behind us it was apparent consumers continue to use mobile technology and Web self-services as shopping tools. Throughout December, 5.6 percent of all site visits were initiated from a mobile device. IBM (News - Alert) in an analysis found that both Black Friday 2010 and Cyber Monday 2010 delivered strong double-digit growth over 2009.
Analysts have been revising their earnings estimates upwards in the last 90 days, believing Google earned $8.09 per share, which was confirmed today at $8.75 per share, excluding expenses for employee stock compensation. The increase possibly reflects that Google was able to sell more online ads at higher rates during the holiday season.
It cannot go without being mentioned though that Google Instant was in effect for the full fourth quarter, which could also help click and ad rates. And, last quarter Google went out of its way to talk about its other businesses beyond paid search trying to push the envelope because search advertising can’t keep growing at its current rates. No matter the reasoning, Google, Inc.'s 4Q earnings were expected to provide the latest reminder of the company's dominance as an Internet gateway and marketing machine, and THEY DID, illustrating why its rivals and regulators are becoming increasingly wary of the online search provider.
Following Google’s 4Q report, it was announced that Larry Page (News - Alert) will be replacing Google CEO, Eric Schmidt. Effective April 4, co-founder Larry Page will take over as Google’s CEO, and Schmidt will take on the role of executive chairman. Google explained this news by saying it’s making the changes to “streamline decision making and create clearer lines of responsibility at the top of the company.” Schmidt recently reached out to the public via Twitter saying, “When I joined Google in 2001 I never imagined—even in my wildest dreams—that we would get as far, as fast as we have today. Search has quite literally changed people’s lives—increasing the collective sum of the world’s knowledge and revolutionizing advertising in the process. And our emerging businesses—display, Android, YouTube and Chrome—are on fire. Of course, like any successful organization we’ve had our fair share of good luck, but the entire team—now over 24,000 Googlers globally—deserves most of the credit.”
Jaclyn Allard is a TMCnet copy editor. She most recently worked on the production team at Juran Institute, a quality consulting firm producing its own training and marketing materials. Previously, she interned at Curbstone Press, a nonprofit publishing press in Willimantic, CT, and fulfilled the role of Editor-in-Chief for the literature and arts journal published by the University of Connecticut. To read more of her articles, please visit her columnist page.
Edited by Jaclyn Allard