It had to happen sometime: Google missed Wall Street’s Q4 profit view by a wide margin, sending its shares tumbling. It had profits of $372 million, up from the year-ago $204 million. Net revenue, excluding the money Google shares with partners, was in line with estimates at $1.29 billion.
More important, the search giant put its non-GAAP earnings at $1.54 a share. Analysts surveyed by Thomson First Call were looking for $1.76.
Q4 traffic acquisition costs, reflecting the amount paid out to ad partners, was $629 million, or 33% of ad revenues. Revenue from Google-owned sites rose 24% sequentially to $1.1 billion and represented 57% of total revenue. Revenue from Google’s partner sites rose 18% from third-quarter levels to $799 million, or 42% of total revenue.
Release: Revenues from outside of U.S. contributed 38% of total revenues, compared to 39% in the Q3 2005 and 35% in Q4 2004.
In after-hours trading, Google stock is down about 17 percent…
From conference call: Update on Google-AOL Deal: “It is a very deep partnership involving video and ad sales. We’re busy planning all aspects of the partnership. There is no hiccup, no negative flow. We’re spending a lot more time traning their sales force on technologies.”
Google image search: We have done experiments with images…we see that people who go there are doing just that: looking for images. We’re trying to figure out how to integrate contextual ads. We can certainly sell images, but we already supply them a lot of free images.
More from conf call: InternetNews: Google CEO Eric Schmidt promised analysts that the company’s extension into traditional media would fuel tremendous revenue growth in the future. Advertisers would like to get the same kind of accountability and tracking that search advertising provides in other media, said Google cofounder Sergey Brin. The technology that came with the recent acquisition of dMarc Broadcasting could do it.
You can download the audio of the conference call here. (9.7 MB, 56 mins…the audio is missing the first 5 mins, but that’s just release stuff)
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