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Q1-09 Call: Google: People Are Searching, But Not Buying; Would Be Glad To Work With Twitter

An interesting last question on Google‘s earnings conference call sought the companys view on the monetization of Twitter. Google CEO Eric Schmidt wasn’t specific, saying that “Twitter proves that innovation is alive and well in Silicon Valley; it’s come along very strong. How can you make money from that? In case of a number of real time companies like Twitter – it can be a channel for product info, market info, can have a text ad or a video ad. It’s a logical track to pursue, and we would be glad to work with them on that. Twitter proves that people really want to communicate.”

CPC Advertising Trends

Google declined to make any forward looking statements, or give any guidance; Schmidt said that “we’re still in unchartered territory.” Smaller customers continued to spend, though larger advertisers cut down since they see search as a marketing expenditure. People are more keen on searching, but not as keen on buying or clicking. Consequently, advertisers are bidding lower for improving their return on investment. At the same time, advertisers are willing to take all the clicks Google can give them at current cost per click (CPC). There is high growth in CPC in China and Brazil. As the economy comes back, Google expects things will be back to normal.

Schmidt also said that the Q2 and Q3 are usually weaker.

Android on Netbooks: Google believes that Android is going to have a very very strong year. “There are announcements happening between now and end of the year – with operator partners. On the netbook side, a number of people have ported it over netbook and similar devics. that’s the benefit of the open source model.” 

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Investment: Google also doesn’t expect to use much of its cash soon – Schmidt said that the company will be very very conservative. 

Downsizing Sales: Google has downsized its sales team – they’ve looked at performance in each emerging market, and have cut back on those that weren’t performing. They’ve also focused on reducing overlaps in the sales forces – the rationalizations is not becase the business is declining, but “when you grow as fast as we have, it’s just about taking a pause,” said CFO Patrick Pichette.

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