This story was written by Joseph Weisenthal.
Google's (NSDQ: GOOG) conference call is getting underway, and it should be an interesting one, following the miss. One interesting wrinkle so far: Google's Chief Economist Hal Varian is on the call, and will talk about the economics of the business. Kicking thing off Schmidt began: "We're obviously happy with what we believe are good results..." He hedged though,saying that Q2 is traditionally weak and that economic conditions are uncertain. He then quickly segued to the company's deal with Yahoo (NSDQ: YHOO), calling it the company's "signature event" of the quarter, and then quoting Chief Legal Officer David Drummond in defending the deal.
- Outgoing CFO George Reyes: Slight decline in paid clicks is a result of seasonality and focus on quality ads. An interesting note: interest gains were weak in the quarter ($58 million vs $167 million in Q1) due to lower cash yields, increased hedging expenses and a decrease in cash balances due to DoubleClick.
-- Chief Economist Hal Varian: "Year on year revenue growth in every sector is positive except real estate" Weak components: auto financing, real estate agencies, real estate financing. "Year over year auto ad spend is up, even though auto financing is down auto financers are willing to spend on click, as the weakness is on the consumer side." However, other consumer areas are up. To summarize: consumers are being cautious in their online spending, as they are offline." (Ed note: he's interesting, but that was too short. They should let him talk more.) Bottom line: even Google isn't immune to the economy.
-- Sergey Brin:: Always the least substantive part of the call touting some initiatives like results that show up faster, Google translation tools, cross-language search and iGoogle (he changes his theme everyday). YouTube: 13 hrs. of video uploaded every single minute.
By Joseph Weisenthal