Sideline Interview at the Chess Match: Google Earnings Today
The machinators at Google have had quite a lot of big news and change in recent weeks.
So even if CEO Larry Page follows through on his promise not to show up at all on analyst calls, going forward, it should be interesting to hear the company reflect on its most interesting quarter and what has happened since. Results are out today after the markets close, with the follow-up call at 1:30 pm PT.
Analysts are expecting earnings per share of $12.26 on revenue of $16.75 billion.
Let’s take a quick tally of Google’s recent global chess moves, some of them out in the open and some of them still in development:
The most recent biggie: Google is selling Motorola Mobility to Lenovo for $2.91 billion. That’s a loss from the overall acquisition two years ago, but times have changed in the interim. There’s still a lot of explaining to do; for instance, what happens to the leaner and perhaps meaner Motorola team that Google had put in place under Dennis Woodside. All we really know is the advanced research group would be staying home to work for Android.
But overall, offloading Motorola may help Google keep the peace with its frenemies and regulators, which had side-eyed the relationship between the Android platform and one of its hardware partners under the same corporate roof. For instance, Android partners like Samsung were crunched when Motorola aggressively lowered prices late last year on its current flagship phone, the Moto X.
Speaking of those partners, there’s also the behind-the-scenes discussions we reported yesterday to bring Samsung closer to Google’s vision of Android, removing some redundant apps and toning back a flashy new user interface. That seems to be more of a concession on Samsung’s part, but of course this is just one chess move in the larger game where Samsung is the dominant Android device seller.
Another big international competition issue that Google appears to be moving on is its antitrust deal with EU regulators. The company is now making a new set of “much better” concessions around how it treats rivals in search results, after previous proposals failed to be fully approved, Reuters reported yesterday.
And back to the done-and-done column, Google and Samsung have already announced a patent cross-licensing deal described as wide-ranging. While the nature of patent portfolios is always to lack clarity around what they cover and how well they will stand up in court, it’s another big move in the game.
And then there’s the jumbo acquisition front. Google has been throwing around a ton of money in recent months, having nailed down Nest for $3.2 billion, DeepMind for at least $400 million and Boston Dynamics for what must have been a considerable price (the humanoid robot maker was founded in 1992 and had multimillion-dollar contracts from DARPA).
Not to mention the main focus of the quarter: Existing revenue streams and costs.