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Alphabet Inc. Message Board

  • investora2z investora2z Apr 20, 2013 5:21 AM Flag

    Innovation is the key to rapid growth

    Numbers apart, the focus of the earnings release remained on innovation. Page said that incremental improvement is guaranteed to be obsolete over time.. The eagerly awaited Glass and other projects like self driven cars were mentioned. In its quest to innovate & grow, Google has to always remain alive to unintended patent infringements and disturbing the privacy sentiments across cultures. Patent & privacy suits are increasing and spoiling the image of the company. Even Facebook (FB) and LinkedIn (LNKD) are facing lawsuits filed by a subsidiary of Document Security System (NYSE:DSS) which is an innovator in document security solutions. Apple (AAPL) has crashed mainly because of lack of innovation. Meanwhile, the Q1'13 went okay with a revenue of $13.97 billion (a 31% rise on a YoY basis). The Traffic Acquisition Cost (TAC) was $2.96 billion (25% of ad revenues, same percentage as Q1'12). The operating margins appear to have reduced with the figure for operating income in Q1'13 being $3.48 billion which is 25% of revenues compared with $3.39 billion (32% of revenues) last year. The GAAP net income increased from $2.89 billion to $3.35 billion during the same period. The GAAP EPS increased from $8.75 to $9.94. Ad Revenues comprised 93% of the total showing a growth of 22%. Site reveneus were 67% of the total, network revenues 25%, and other revenues 8%. Out of these, the network revenue showed the slowest growth of 12%, and the other revenues grew by 150% on a small base of $420 million to $1.05 billion. Geographically, international revenues were 55% of the total compared with 54% in Q1'12. Paid clicks increased 20% on a YoY basis and 3% sequentially. The Cost-Per-Click decreased by around 4% on YoY and sequential basis. Motorola revenues were $1.02 billion in Q1'13. Other Cost of Revenues was 21% of revenues compared with 12% of revenues in Q1'12, which put pressure in the operating margins.

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