nikesh-arora

Asa Mathat

General


Google’s Q2 earnings report was overshadowed by news about the top of the company’s org chart: Nikesh Arora, the company’s longtime sales boss, is out, and headed to a top job at tech conglomerate SoftBank. He’ll be replaced, at least temporarily, by Google veteran Omid Kordestani.

Google’s Q2 results themselves were mixed: It generated earnings of $6.08 per share on revenue of $12.7 billion, and analysts were looking for something like $6.25 and $12.3 billion. Wall Street seems fine with all of the developments, and left Google’s shares mostly unchanged — they’re up one percent in after-hours trading.

For now, here’s Google’s statement about the departure: “Nikesh Arora, our Chief Business Officer, will be leaving Google after almost ten years at the company to join one of our partners, SoftBank, as Vice Chairman of SoftBank Corp. and CEO of SoftBank Internet and Media. He will join this afternoon’s earnings call as usual. Omid Kordestani, who was our business founder and led our sales teams for many years, will be stepping in to lead our business organization for now.”

In 2012, Google made Arora its highest-paid executive, with a total compensation package of more than $51 million. That number included an $8 million cash bonus that Arora agreed to return if he left the company before April 2015. But in a filing with the SEC today, Google said its board had waived that requirement.

Read the liveblog of the call here:

Peter Kafka July 17, 20141:34 pm

Good afternoon! Thanks for joining me. 

Peter Kafka July 17, 20141:34 pm

CFO Patrick Pichette is on the call, as is Arora. As has become standard for the last few calls, CEO Larry Page isn’t here.

Peter Kafka July 17, 20141:36 pm

Pichette running through prepared commentary on #s. Most of that is here already, so I will spare you most of the details.

Peter Kafka July 17, 20141:41 pm

Market seems fine w/Arora news and #s – stock is basically flat, up a couple percent.

Peter Kafka July 17, 20141:42 pm

Arora on now, going through product and sales highlights. 

Peter Kafka July 17, 20141:43 pm

Arora highlighting improvements on products aimed at small businesses.

Peter Kafka July 17, 20141:48 pm

While Arora keeps reading, lets recap some of the org changes Larry Page has either made or overseen in the last few years: Sundar Pichai is now running mobile, and former Android boss is working on robots.  And former ad product boss Susan Wojcicki is now running YouTube.

Peter Kafka July 17, 20141:49 pm

Arora just thanked Googlers. Now Pichette is thanking him for a “decade of work.” Then he tells analysts not to ask about Arora’s departure.

Peter Kafka July 17, 20141:50 pm

RBC’s Mark Mahaney asks for comment on YouTube revenue, sparked by The Information’s report that its numbers are both below analysts’ estimates and Google’s internal goals. Non-answer from Pichette.

Peter Kafka July 17, 20141:53 pm

Whoops! Two analysts have wished Arora well at his new gig. Hope they don’t get in trouble for straying off topic.

Peter Kafka July 17, 20141:54 pm

Analyst wants to know about timeframe for profitability on projects like self-driving cars. “Obviously multi-year,” says Pichette. For projects like that, Google thinks about “half-decades, maybe longer” before we can really assess them.

Peter Kafka July 17, 20141:59 pm

Analyst wants to know when app content will start showing up in core search results. Also, will you be running ads and selling Google Play content on new devices like smartwatches?

Peter Kafka July 17, 20142:01 pm

App indexing will happen “most aggressively,” Pichette says. But no timeline.

And re screens: “Take a more longer time point of view” — people will want to switch from device to device, and expect services to work on all of them, so we’re working on that. “If that works out, there will be enormous business possibilities” — but we figure out user case first, monetization later.

Peter Kafka July 17, 20142:04 pm

Analyst wants to know what’s up with Google Fiber. How much does that cost? What’s the timing on rollout to other cities?

Peter Kafka July 17, 20142:06 pm

Pichette: “Here’s what’s going with Google Fiber”:

*Economics today are “clearly much cheaper” than they used to be. 

*We’re building to demand, instead of over-building. And we work w/cities to keep costs down. We’re working w/34 cities right now.

*We should have any update with actual news sometime before the end of the year.

Peter Kafka July 17, 20142:13 pm

Q&A about CPCs – that’s cost-per-click, or alternately “how much we sell our ads for” — because that’s what analysts are usually interested in during Google earnings. Or, rather — that’s one of the few topics Google will talk about. And this quarter, the company has offered up a bit more detail about CPCs in its release. Not much more info in the call, though.

Peter Kafka July 17, 20142:14 pm

You are not surprised by that.

Peter Kafka July 17, 20142:19 pm

A Q about Android and Chrome, and Chromebooks. Not quite sure what it is, though. So that makes it hard for Pichette to answer, but he is rambling on anyway – notes that Sundar Pichai runs both groups. 

Peter Kafka July 17, 20142:21 pm

YouTube Q: “How high do you want to get in the professionally created content funnel”? Which I think means “Are you going to get something really good, like ‘House of Cards’ on YouTube? Or more PewDiePie?”

Peter Kafka July 17, 20142:22 pm

Arora: “YouTube has all forms of content on it today.” Michelle Phan and clips from people like CBS and Viacom, who used to sue us.

Peter Kafka July 17, 20142:23 pm

Another analyst has thanks Arora! Into the IR spanking machine he goes.

Peter Kafka July 17, 20142:23 pm

Oooh. A good question: Take Google Fiber, and take YouTube — don’t you want to end up with some kind of subscription service one day?

Peter Kafka July 17, 20142:25 pm

Pichette: “I think it’s a very good question. It’s an area where there’s a lot of movement across the board.” We know people will consume more broadband, and more content, and we’re going to experiment and blah blah but “eventually the user will decide.”

Peter Kafka July 17, 20142:27 pm

One last Q! Hope it is a blockbuster.

Peter Kafka July 17, 20142:27 pm

Good luck, Nikesh!

Peter Kafka July 17, 20142:27 pm

Also: You already know how to sell some stuff like you do on Google Play. Might you do more direct selling via Google Commerce?

Peter Kafka July 17, 20142:29 pm

And also a second question, which gets Pichette to cite something called “The Simpson’s Paradox,” which, unfortunately, is not about the The Simpsons.

Peter Kafka July 17, 20142:30 pm

Arora thanks everyone. So does Pichette. And we’re done! Have a lovely day.




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