Live-Blogging Google Earnings Call

Earnings calls aren't usually a thrill a minute, but Google's third-quarter call this afternoon could offer some real drama. Watch this post for updates as they happen on the call.

google, search, mobile, social networks

google, search, mobile, social networksEarnings calls aren’t usually a thrill a minute, but Google’s third-quarter call this afternoon could offer some real drama.

CEO Larry Page has been markedly absent for several months, claiming that he’d lost his voice. He re-emerged publicly recently, and will likely lead the earnings call today.

The financial numbers leaked earlier today, causing stocks to plummet. What will the company’s response be?

In the press release, the company emphasizes the positive in its numbers.

“We had a strong quarter. Revenue was up 45 percent year-on-year, and, at just fourteen years old, we cleared our first $14 billion revenue quarter,” said Page said in his statement.

But there are some notable omissions in Page’s take. First, Google’s gross revenue — or intake, before any spending — is up because Google began to claim Motorola revenues last quarter. Secondly, revenue is great, but profit — revenue minus spending — is really what matters, and profit in the third quarter of 2012 was just $2.18 billion, compared to $2.73 billion in the third quarter of 2011.

That’s the background. Watch this post for updates as they happen on the call — assuming the bandwidth isn’t too jammed to let us in.

1:33: Larry Page is on. His voice is weak.

“I’m sorry for the scramble earlier today. We had a strong quarter. I’m really happy with our business.”

He gives an overview: Mobile monetization is already a significant fraction as compared to desktop. [translate: it’s way smaller, but it’s growing.] Users changing from one screen to another is an “enormous opportunity.”

“Today there are over half a billion Android devices, with 1.3 million more being activated everyday.”

Last year $2.5 billion run rate from mobile advertising. Today, the run rate is now over $8 billion.

1:37 As screens multiply it’s more important than ever that we converge our services. Users want one simple, beautiful Google experience. Technology should do the hard work. Screen independence is at the core of our strategy. When you’re using Chrome, switching devices is truly painless.

1:39 In advertising “campaign experience,” mobile opportunities often get missed.

1:41 Page talks up the knowledge graph. There’s much more that we can do to get you the right information at just the right time. You might have an important event but traffic is bad and you need to leave early. Google Now which we launched on Android in June gives you all that information and more.

1:42 Introduces Patrick Pichette, CFO
Pichette gives his overview: Overall we’re very pleased with the growth this quarter, despite currency fluctuations. U.S. growth continues to be strong.

More detail on $8 billion annual run rate on mobile: Last year’s number included only gross revenue from mobile ads, now it includes revenue from Play ads and consumer spending on Play apps.

1:43 Nexus 7 sales drove “other revenue” category up. Some of our existing [mobile] ads have better monetization than desktop today.

Motorola: Our team has made a lot of changes. That said, we’re just at the beginning of the Motorola/Google story. We should expect numbers [related to Motorola] to be very variable.

Paid click growth up 6 percent. Aggregate CPC down 15 percent, but remember that currency headwinds also had a significant effect.

1:45 U.S., UK, Japan: had robust growth. Hurt by economic woes in Europe. Revenue from US up 23 percent. Non-U.S. revenue accounted for 42 percent of total.

Motorola had an operating loss in Q3.

1:48 Headcount went down by about 1,000. Google added about 1,800. [That means Motorola dropped 2,800.]