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Well, two days after Google CFO George Reyes spooked investors with comments about the difficulties the company was facing in tapping into new growth opportunities each year, the Google guys went on the charm offensive at Google Analyst Day on Thursday. As Reuters reports, the talk was relentlessly upbeat. (In fact, the CFO didn't even mention in passing what happened on Tuesday) CEO Eric Schmidt even went so far as to hint that Google was capable of doing $100 billion in revenue every year:
Top executives outlined plans for far more capital spending and ambitious overseas growth, suggesting they are taking aim at building a $100 billion company.
"His implication was that it was revenue without it being seen as formal guidance from the company," said Martin Pyykkonen, a financial analyst from Hoefer & Arnett who was present in the audience."
Anyway, it looks like everything is OK in Google-land. Shares of the company bounced more than 3.2%, to $376.45, on the upbeat prognosis. Or is it?
I tuned in to the first 45 minutes or so of the live Google Analyst Day Webcast, and quite frankly, there's a whole back story that wasn't mentioned in the Reuters clip (including the fact that the lights and projector kept experiencing problems during the first 30 minutes or so, at one time even leaving the room in total darkness):
(1) More than a few times, Google's CFO and CEO referenced the "founder's letter" and made sure that Wall Street analysts focused on the fact that Google circa 2006 is the same ol' lovable Google that investors fell in love with five years ago.
(2) CEO Eric Schmidt devoted several PowerPoint slides to the "Wisdom of Crowds." Last year, Google talked about the "Long Tail" of content.
(3) CEO Eric Schmidt painted a rosy picture of Google "exporting" its unique business model to the most populous nations of the world - India and China - and included all kinds of PowerPoint slides showing the Google guys in some of the most remote rural locales of India.
(4) CEO Schmidt focused on two key facts: (A) serving end users (B) delivering quality advertising. These two factors drive the rest of the Google business model, and lead to billions of dollars in revenue, cash flow and shareholder value.
TRANSLATION: "Keep your eyes transfixed on these two things and ignore everything else. Forget about pesky things like margins and everything else. As long as people believe we have the best search engine, everything else falls into place."
(5) CEO Schmidt mentioned more than a few times the company's world-class software and hardware infrastructure.
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