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Google Q4-2012 Concall: People Watched 4 Bn Hours Of Video On YouTube; Maps, Future Motorola Devices


Google has reported consolidated revenues of $14.42 billion for the quarter ending December 31, 2012, up 36% growth in revenues year-on-year (YoY) and 8% quarter-on-quarter (QoQ). Here are some notes from the Google’s Investor conference call:

- On Search Initiatives: Google CEO Larry Page informed that Google has launched Knowledge Graph in seven new languages including Spanish, Japanese and Russian during the quarter. He also mentioned that they have improved Google’s voice search service and its personal assistant service Google Now during the quarter, but didn’t disclose any specific details. Remember that Google had introduced Google Now and an improved voice search as part of Android 4.1 ‘Jelly Bean’ release. While Google Now proactively offered personalized information to users, learning from their search history, calendar appointments, habits and activities among others, the improved voice search had the ability to understand natural language queries and delivers answers in addition to a list of search results.

During Google’s Q2-2012 concall, Susan Wojcicki, Google’s Senior Vice President for Advertising had said that Google has been continuously investing on voice search capabilities for several years and they believe that they have a good technology in place.

- On Advertising: Nikesh Arora, Google’s Senior Vice President and Chief Business Officer, informed that Google’s top 25 advertisers are spending an average of $150 million every year across search display, YouTube and other advertising channels. Reiterating Google’s multi-screen opportunities which was touched upon by Page in Q3-2012 concall, Arora stated that they are continuing to receive a significant amount of search queries from new form factors and the distinction between devices and form factors are becoming less meaningful, particularly across desktop, laptops and tablets. However, he didn’t reveal any specific information on the amount of search queries generated during this period.

During the quarter, Google inked a global deal with the popular cosmetic brand L’Oreal, through which they promoted L’Oreal products across their digital offerings including Display, Search and YouTube among others. Although the deal period or the financial details of the partnership were not disclosed. Arora also mentioned that their election advertising revenues in the United States increased by five times as compared to the 2008 elections.

- Google Shopping: Arora added that their search volumes significantly increased during the quarter due to Black Friday and Cyber Monday initiatives. He also mentioned that they have introduced a set of new features to their Shopping product during the quarter, which includes 360° toy imagery and integrating retailers’ promotions and discounts to the product. Arora cited examples of major US retailers like RadioShack and Home Depot integrating Google’s click-to-call and click-to-map features to their mobile apps and claimed that Home depot had quadrupled its mobile commerce sales in the past year.

- YouTube: Arora stated that viewers watched over 4 billion hours of video on YouTube every month in 2012 and the  revenue generated from the YouTube Partner program has doubled for the fourth consecutive year, with thousands of YouTube channels generating six figures revenue on an annual basis. While he didn’t mention any specific details on the partner revenues, he mentioned that Psy’s Gangnam Style video which recently became the most most watched video on YouTube, had generated over $8 million revenue in an all-in advertising deal, citing outside estimates.

He also mentioned that 70% of their in-stream ads on YouTube were now using the skippable TrueView ad format and the company has now extended this format to Xbox, Wii and the iPad.

- Google Maps for iOS: After Apple dropped Google Maps as the default maps app in iOS 6, in favor of its own in-house Maps app, Google had launched a native Google Maps app for iOS in December 2012, which offered features like voice based turn-by-turn navigation, public transport directions and its Street View service among others.

Interestingly, the company had also launched an URL scheme and an SDK for its iOS maps app, enabling third party app developers to utilize Google Maps service in their iOS apps and link to Google Maps iOS app, thereby bypassing the Apple Maps app entirely. Page informed that Google Maps for iOS registered 10 million downloads in the first 48 hours. He pointed out that Apple had featured six Google Apps in its 2012 list of best free apps in the app store. These include YouTube, Chrome, Google Search and Gmail among others.

- Enterprise Business: During the quarter, Google signed up several new customers for its enterprise offerings. These include Nintendo, the Canadian Broadcasting Company, Shaw industries, Costco, Randstad and Hyundai among others. The company has also inked a deal with the U.S. Department of Interior in May 2012, to roll out its Google Apps product to over 70,000 employees.

- Future Motorola Devices: Speaking on the possible opportunities through Motorola Mobility, Page pointed out that battery life continues to be an issue with the current smartphones and noted that these devices should be a lot faster, easier and feature better build qualities. Patrick Pichette, Google’s Senior Vice President and Chief Financial Officer also added that they inherited a 12-18 months product pipeline as part of the Motorola acquisition and the company is currently working on this product pipeline.

During the quarter, Google launched two new Nexus devices during the quarter – Nexus 4 and Nexus 10, although Google had partnered with LG to develop these smartphones. Speaking on the current supply issues faced by the Nexus devices, Page said that they definitely need to manage the supplies better and improve the customer experience, which has been set as a priority for the involved teams.

- Google Play: During the quarter, Google inked deals with Time Inc and Warner Music Group during the quarter, to provide content like magazines and music respectively through Google Play. However, its worth noting that Google Play still doesn’t offer any content in India, besides Android apps through Google Play Store, while Google’s competitor Apple had extended iTunes Store to India last December, allowing users to buy and download local and international music and music videos, and rent or purchase films (HD films included) from the store.

- Other Revenues: As reported earlier in the day, Google had reported $829 million as other revenues for the quarter, registering a 102% growth from $410 million in Q4-FY11 and 24% QoQ. While it was not clear as to what was included in these ‘other revenues’ back then, Pichette informed during the concall that these revenues included revenues generated from content sales and hardware sales on Google Play.

- Google Headcount: Pitchette informed that Google added around 1,400 people to its headcount during the quarter, while the total headcount increased only by about 300, indicating that Google has dropped 1,100 people from the Motorola business. According to the company’s earnings release, Google had added around 1,426 employees, while Motorola had dropped 1,111 employees during the quarter.

- On Future Opportunities: Page informed that Google’s biggest challenge is to focus on right opportunities and thoughtfully invest in these opportunities to generate maximum impact. He also pointed out that Google Earth remains the company’s greatest asset although he didn’t reveal any specific future plans for the product.

Related:

- Google Q3 2012 Concall: On Multi Screen Opportunities, Mobile Run Rate & Trends
Google Q2-2012 Concall: On Motorola Mobility Acquisition, Voice Search & Mobile Advertising
- Google Q1 Results: Stock Split; 850,000 Android Activations Daily; 170M Google+ Users; Financials