Blog Post

Google Says Viacom Lawsuit Cost $100 Million

During Google’s earnings call Thursday, executives declined to comment on the much-speculated financial state of YouTube. “What I can tell you is we’re incredibly pleased by its trajectory,” CFO Patrick Pichette said in response to a question. Pichette did however outline one cost Google (NSDQ: GOOG) had incurred in running the site, saying that Google had spent $100 million to fend off its long-standing litigation with Viacom (NYSE: VIA). A judge ruled in Google’s favor last month.

Executives also provided a new nugget about the company’s Android business, saying its costs were “not material” to the company and emphasizing that much of the expense is being absorbed by partners who are developing phones running the operating system. “It is not a huge resource investment,” Pichette said. As for returns, executives noted that searches being done on Android phones had jumped 300 percent during the first half of the year but wouldn’t provide any additional color.

Some other highlights:

Brand advertisers: Executives started off the call by emphasizing how brand advertisers were increasingly embracing the company’s products.
Pichette said “more and more traditional brand advertisers” are running campaigns on its search engine, noting that P&G is one of its top advertisers. Same goes for YouTube, which Pichette says is now a “must buy” for many big advertisers.

Search: Asked whether the company’s share of the search market had dropped, executives said it had not and added that they were “very pleased with our results right now in terms of market share.” Pichette said that there was “noise” in third-party measurements.

M&A: Pichette defended the company’s acquisition spree as being “disciplined.” He said Google was looking for a “sweet spot” of companies that have “great engineering talent,” “intellectual property,” and an appropriate price. “There’s a price after which it’s not worth it to us,” Pichette said.

Omnicom deal: Google confirmed a partnership with Omnicom, which has agreed to spend an unspecified amount of its display campaign dollars through Google