Google Earned Over $9 Billion In Revenue In Q2

[thematt]

Good for them and I think the best is yet to come. I view Google's work on robotics and automated vehicles as a secret weapon. Should the future consist of semi/fully automated vehicles (a very realistic possibility) Google is going to have a warchest of patents, licenses and technology that will generate tons of cash.

[rkalla]

Good way to describe those 1-off/advanced initiatives. It really does seem like a hedged bet in some cases and a great way to keep people inside the company engaged/curious/thinking outside the box.

I thought Google was also doing significant funding (and research?) into high-efficiency solar panels.

To me, all of these efforts smell (in a good way) of some VERY forward-thinking people. Autonomous cars directed by Google technologies (Google Maps, showing Google Ads to the driver while engaged on an Android-based, internet device) and powered by ultra-high-efficiency solar panels is a future you can think yourself towards if you are ambitious enough and sitting there fitting pieces together.

Not saying they are going to get into all those industries, but it's not like these 1-off efforts are focused on optimizing vacuum cleaners to compete with Dyson or making the world's most resilient non-stick pan; there is some tangential connection to a greater future image in all of it, even if it's a vision 20-years-off.

It makes me really happy to know that there are people in this world, sitting around just trying to poke and prod the limits of what we know and drive us forward, even if the future ends up taking a slightly different shape.

[jcampbell1]

In terms of automated vehicles, I think Google is in the same place as Xerox was 40 years ago with the Xerox Alto. Like Xerox at that time, they have a business that is absurdly profitable that funds interesting research that is well ahead of its time, but there is little motivation to make something commercially viable. I haven't worked at google, but I image the employees are motivated to do things that make a huge splash, rather than build businesses incrementally, because any business they could build within Google would be completely dwarfed by ad revenue, much like 1973 PC business compared to the 1973 copying machine business. If google were really interested in automated vehicles, they would be selling radar assisted braking software, pedestrian alert systems, lane control systems, etc.

[dangrossman]

Does Google really have any of that? The automated vehicle tech was entirely from the DARPA Grand Challenge / DARPA Urban Challenge teams who 'solved' the autonomous driving problem years prior. Any patents and licenses are owned by those teams and the universities they come from. From the articles I read way back when it sounded like Google was just working with those people to hook their systems up to Priuses with no mention of developing anything of their own. Maybe I missed it in other coverage.

[Eliezer]

I'd find that especially amusing because "Google is an AI company, they just don't advertise the fact." If they can't make money on anything except AI, that would be strong confirmation.

[tambourine_man]

Google is going to have a warchest of patents, licenses and technology that will generate tons of cash.

That would be the case if the patent system isn't completely different in 10-20 years, which I sincerely hope it will. Having Google as the next big patent troll would be a sad and ironical stain in its history and a deep stab at our generation.

[yaakov34]

It's useful to keep these numbers in perspective in all the excitement. Browse http://en.wikipedia.org/wiki/List_of_companies_by_revenue and convince yourself that we're not quite living in a virtual world yet. The list is dominated by giant oil companies, with Exxon and Shell with $370 billion in annual revenues a piece (that's more than the GDP of all but around 25 nations). Manufacturing is also pretty well represented (Toyota: $240 billion in revenue in 2010). On the other hand, Apple now apparently outsells Boeing. That's pretty impressive.

[rafaelc]

Look at the margins when comparing Google vs. oil companies. That paints an entirely different picture.

[6ren]

BTW Apple is third by market cap http://en.wikipedia.org/wiki/List_of_corporations_by_market_...

[coolgeek]

(Sorry if this comes across as pedantic, but the dissonance here is striking.)

"Revenue" and "earnings" have fairly specific meanings, particularly with regard to each other.

"Google earned $2.85B on revenues of $9.03B in Q2" would have been a better title, as would "Google revenues top $9B in Q2".

[zandorg]

I once attended a job fair/event at my University, and the guy from HP said (to a crowd) they have PROFITS of $80 billion a year. I didn't inform him that was REVENUE, I just walked out on him.

[steveb]

I wonder how much longer the big losses at Bing will be allowed to continue.

The Yearly growth in Google's revenue this quarter alone is almost equal to the entire annual revenue of Microsoft's online division.

Google is growing at 25-30+% while MS online grew 14% in the spring quarter.

And it costs MS about two dollars to generate a dollar of revenue online.

[arctangent]

It's possible that MS is prepared to spend money in "inefficient" ways if that means that they're preventing money going into their competitors' pockets.

[megablast]

Well is Google is making more money, then Microsoft should be making more money as well, since people are spending more on online advertising. This is not stopping anytime soon, so why would Microsoft give up just as they are starting to make some gains (albeit by buying Yahoo search).

[zmmmmm]

What always strikes me about Google's numbers is that they seem relatively small when taken in context of how large Google seems to be in its presence and perception. People talk about Google as a tech "giant" - but compare revenue numbers:

  Google - $9B
  Apple  - $24B
  IBM    - $29B
  Microsoft - $16B

Based on this in terms of being a "tech giant" Google would seem to be the underdog - yet they certainly aren't perceived or treated that way.

[robryan]

Revenue is a bad way to compare these companies, Apple is selling $1000 iphones and $2000+ laptops, which have a fairly high production cost. Whereas the margin on a PPC click would be massive.

[canistr]

If you just compare to companies in the semiconductor industry or other various "behind the scenes" players, practically all of them have billions of dollars in revenue.

So Google earning $9 Billion isn't as big of a deal as everyone thinks it is when you put it in context of the whole high tech industry.

[dangrossman]

Stock is up 12.18% in after-hours trading. At their size and stock price that's amazing. Boy do I wish I had a few shares now.

[earbitscom]

A company at that size growing 32% Y-o-Y is just amazing. Go Google.

[MikeCapone]

What's impressive is that they'er doing it mostly by giving people what they want and providing best of breed services rather than by using every opportunity to lock people in and attack their competitors with underhanded tactics (cough patent trolling).

[trentfowler]

Holy Bejesus!

Edit: I'm no stock market wizard but I would still buy Google stock tomorrow. For the foreseeable future, they're going up up up. Mark my words, they'll be pulling 10 billion a quarter before too long.

[18pfsmt]

A savvy investor would wait for the market to cool off in a bit and buy at a much lower price. We haven't seen $600/share since March, but if you see how these things operate over a duration you will see that after most spikes there is a pull back. Wait for the pull back.

EDIT: Also, options expire tomorrow (3rd Friday of every month), so there is ample manipulation opportunity.You can get an idea of what's going on in the options market here:

http://www.google.com/finance/option_chain?q=NASDAQ:GOOG

[secretasiandan]

Given the information in your post, it is a bad idea to buy GOOG.

You have provided no proof that your expected growth is not already baked into the price.

[ChuckMcM]

It is interesting to compare that number to VC funds [1]. In the first half of 2011 there was 10.2B$ raised for funding startups, in the first half of 2011 Google put $5B in the bank.

[1] http://nvca.org/index.php?option=com_docman&task=doc_dow...

[juiceandjuice]

Sounds like Larry knew what he was doing.

[jackowayed]

I can't imagine that Larry had a major impact on the revenue in his first quarter in charge.

[zentechen]

Looking at the slide, with my limited accounting knowledge, it seems Google has managed to decrease the total cost of expense which contributed to the increase in revenue from Q1.

[Hawramani]

I thought revenue was separate from expenses.