Google profit rises, revenue misses some forecasts

Google profit rises, revenue misses some forecasts

SAN FRANCISCO (Reuters) - Google Inc posted a higher-than-expected fourth-quarter profit, but revenue growth was not as strong as some investors had hoped, sending its shares down 4 percent.

Analysts also pointed to signs that Google was ramping up spending as a possible cause for concern, but said that overall the company continued to dominate the Internet search market and delivered a strong quarterly report that fell short of only Wall Street's most bullish forecasts.

Google's problems in China have been an overhang on the stock, which is down about 12 percent since hitting a 52-week high in early January. The company said last week that it might have to close its China operations after a cyber attack and its decision to stop censoring search results.
Chief Executive Eric Schmidt said on Thursday that the China business is unchanged but the company expects to make changes in a "reasonably short time from now."

Google's fourth-quarter profit per share, excluding items, was $6.79, above the year-earlier period's $5.10 and beating analysts' average forecast of $6.48, according to Thomson Reuters I/B/E/S.

Net revenue, which excludes the traffic acquisition costs Google paid to partners, rose 13 percent to $4.95 billion, which was at the low end of some estimates for 13 percent to 15 percent growth. The average forecast was $4.92 billion.

Expectations "got higher as they came closer to reporting and they delivered fundamentally sound numbers, but did not deliver a blowout," said Martin Pyykkonen, senior analyst at Janco Partners. "I think the stock will recover. I don't think it will fall through the floor.
Other analysts pointed to a disappointing 2 percent sequential rise in average cost per click, which is the price advertisers pay Google when Web surfers click on an ad.

"Earnings were much ahead of expectations, but top-line fell slightly below expectations," said Sameet Sinha, analyst at JMP Securities. "I think that is because cost per click was up about 2 percent sequentially, and we had been expecting closer to 5 percent growth."

Google, the world's No. 1 search engine, said its headcount increased to 19,835 employees in the quarter, reversing three consecutive quarters of declines. And the company said it expected to continue to make significant capital expenditures.

"As we enter 2010, we remain hugely optimistic about the Internet and are continuing to invest heavily in technological innovation for the benefit not only of our users and customers, but also the wider Web," said Schmidt in a statement.

He said on a conference call that he expects Google to continue to make an average of one acquisition a month, and saw the mobile business providing the fastest revenue growth outside of search on a percentage basis in 2010.

Net income was $1.97 billion, or $6.13 a share, in the three months ended December 31, compared with $382.4 million, or $1.21 a share, in the year-earlier period when the company took charges for its investments in AOL Inc and Clearwire Corp.

Total revenue at Google rose 17 percent to $6.67 billion. Revenue from outside the United States was 53 percent of the total. Google does not disclose the size of its business in China, where it lags home-grown search powerhouse Baidu Inc, but analysts peg Google's annual China revenue at between $200 million and $600 million.

Google shares fell about 4 percent to $556.75 in after-hours trade.
(Reporting by Alexei Oreskovic; Additional reporting by Tiffany Wu, Sue Zeidler and Gina Keating; Editing by Richard Chang)

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Microsoft seeks to replace Google on iPhone

Microsoft seeks to replace Google on iPhone: report

NEW YORK/SAN FRANCISCO (Reuters) - Apple Inc is talking with Microsoft Corp about making it the default search engine provider for the iPhone, replacing Google Inc, BusinessWeek reported on Wednesday.

If Apple displaces Google from its preferred status on the smartphone, it would be perhaps the clearest sign of the growing tension between two Silicon Valley icons, which were considered allies in a common cause against Microsoft.
Talks between Microsoft and Apple have been going on for weeks, the article said, citing two people familiar with the matter. Negotiations might not conclude quickly and might still fall apart, the article said.

Microsoft and Google declined to comment. Apple was not immediately available for comment.
Microsoft's Bing search engine, which debuted last year, is trying to wrest market share from Google, the leader in Internet search.

Apple's rivalry with Microsoft dates back years, though they work together in certain areas of the software market.

In contrast, the Apple-Google rift is only emerging. The companies compete on a number of fronts, including operating systems and the fast-growing smartphone market.
"Obviously with Google and Apple, they seem to be having some friction," said ThinkEquity analyst Vijay Rakesh.

Until recently, replacing Google with Bing would have been seen as unreasonable, but now such a move might be possible, said Oppenheimer & Co analyst Yair Reiner.

"While Microsoft and Google pose similar threats to Apple, Google's budding success with Android and Chrome may represent more immediate dangers to Apple, which could push it into the arms of Microsoft," Reiner wrote in a research note.

Google and Apple have lived in friendly coexistence for years as each became leaders in their arenas. Google is the default search engine on Apple's desktop and laptop computers.
Their ties run deep. Google director Ann Mather was chief financial officer at animation company Pixar, while Apple founder Steve Jobs was CEO. Former U.S. Vice President Al Gore is an Apple board member and also a senior adviser to Google.

But Google Chief Executive Eric Schmidt resigned from Apple's board in August, even as Google increased its presence in Apple's markets.

Google has been gaining strong support from handset makers and operators with its Android mobile operating system. Earlier this month, the search giant unveiled its Nexus One smartphone, which will compete with Apple's iPhone.

MOBILE RIVALRY
Google recently agreed to buy mobile advertising company AdMob for $750 million, a company that Apple reportedly pursued. Apple bought AdMob competitor Quattro Wireless.
Apple is working on ways to manage ads displayed on its mobile devices, a move that would challenge Google's advertising business, the BusinessWeek article said.

"Apple sees Android as a competitive platform driving competitive devices and it recognizes that Microsoft is desperate to gain search market share," said Clayton Moran, an analyst at Benchmark.

"Microsoft, I'm sure, will give Apple favorable economics so strategically and financially it could make good sense for Apple," said Moran.

The terms of Google's deal with Apple are unknown, though browser toolbar deals in the PC world typically involve the search provider paying an upfront fee to the PC maker, said RBC Capital Markets analyst Ross Sandler.

The search provider makes the money back when PC users click on search ads.

IPhone searches using Google's search bar appear to return more standard, unpaid results than paid search ads, suggesting that Google might lose money on the deal, Sandler said.
For Microsoft to displace Google on the iPhone, "they're going to have to be willing to lose more money than Google is losing," Sandler said.

Microsoft has invested hundreds of millions of dollars in its money-losing online business as it tries to gain an edge in Internet-based advertising markets.

"They're both playing the same game," Sandler said of Microsoft's and Google's mobile plans. "They both need to be there longer term, it's just a question of how much do you have to give up today in order to chip away at that longer term vision."

(Reporting by Gabriel Madway, Alexei Oreskovic, Sinead Carew and Franklin Paul, writing by Gabriel Madway and Yinka Adegoke. Editing by Derek Caney and Robert MacMillan)

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Malaysian GP boosted by Lotus, Petronas

Malaysian GP boosted by Lotus, Petronas

By Jonathan Noble

Lotus's return to Formula 1 and the decision by Petronas to sponsor the Mercedes GP team have been a huge boost to the Malaysian Grand Prix, claims its circuit boss.
Razlan Razali, the CEO of the Sepang track, believes that interest stirred up by the Malaysian-backed Lotus effort and the national oil company's affiliation with Michael Schumacher have provided an unexpected boost to his venue.

"The last six months have seen a tremendous development for Malaysian motorsport," Razali said on the main stage at the AUTOSPORT International Show. "We have seen Lotus F1, which is backed by Tony Fernandes as the new Malaysian team.

"Then Petronas was searching for a new partner. There was a lot of speculation and suddenly out of the blue, it came out with Mercedes. It is a really good development, a world champion team, with the return of Schumacher.

"So for us, as Malaysians, it cannot get any better than this. It is good for us and the country especially."

Razali is hopeful that the event's shift in start time to 4pm, one hour earlier than last year, will help avoid a repeat of the forced abandonment of the 2009 grand prix through bad weather and poor light.

"We haven't seen rain like it!" he said of last year's race. "It was totally different for us as well. At the 2009 F1 race, it was my first F1 event, so it was not helping. But we have shifted the time to 4pm this year and hopefully the weather will be okay this year, but who can control that?
"It was crazy. You couldn't do anything, and there was no room for error really. We ran out of light so we could not continue the race. It was sad, good for television, but I did pity the guys who came to the track on the day."

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Google unveils Nexus One "superphone"

Google unveils Nexus One "superphone"

 

MOUNTAIN VIEW, California (Reuters) - Google Inc took the wraps off the first of its smartphones on Tuesday, a device with speech recognition that it hopes can take on Apple's iPhone over time and help shore up the company's dominance in Internet advertising.

 

 Analysts say the phone -- to be sold directly to consumers -- is not expected to dramatically alter the carrier-hardware vendor relationship the industry relies on, nor is it likely to yield a revenue windfall in the short term, though executives said it could be profitable.

 

Google plans to use what it calls a "superphone" -- the first of many types of smartphones that it will make -- to expand its reach from the PC to the mobile world and ensure its online products and ads get prominent placement on a new breed of wireless Internet devices.

 

 

The highly anticipated Nexus One, which marks the first time the 11-year-old Internet search titan has designed and sold its own consumer hardware device, could provide Google with a viable challenge to the iPhone and Research in Motion's BlackBerry.

 

It "wasn't the game-changer people thought it could be," Canaccord Adams analyst Jeff Rath said. Google could have shaken up the industry by offering the device for free, but instead chose more traditional pricing, he said.

 

Rath added that though his early impression was that the Nexus One was a good phone, it was unclear how much better it was than Motorola's Droid, released last year and that also runs on Google's Android operating system platform.

 

 

"It's very close to the Droid, some people will debate whether it's better. But it looks like an incremental improvement rather than a blow-the-doors-off improvement," Rath said.

 

The Nexus One, which was garnering favorable first reviews on tech Websites and forums on Tuesday, ships immediately from Google's online store for $179 with a two-year contract from Deutsche Telekom's T-Mobile USA, or $529 without a service plan.

 

Executives said the phone will be carried on Verizon Wireless's network in the United States, and eventually on Vodafone's in Europe. Verizon Wireless is a joint venture of Vodafone and Verizon Communications.

WAIT AND SEE

Investors are taking a wait-and-see view on Google's first effort to sell a hardware product directly to consumers.

Google's stock has risen about 7 percent since the start of December, setting a 52-week high of $629.51 on Monday. But analysts say that was driven by improvements in its core business of Internet search advertising, rather than the prospect of tapping a new pool of revenue selling smartphones.

 

Its shares closed 0.44 percent down at $623.99.

The Nexus One phone comes a little more than two years after Google jumped into the mobile market with the announcement it was developing a free smartphone operating system. Google's Android software is currently available on more than 20 phones from vendors including Motorola and Samsung Electronics.

 

It pits Google -- the world's No. 1 Internet search engine, with annual revenue of about $22 billion in 2008 -- against a variety of more experienced players in the increasingly crowded smartphone market, including Palm Inc and Nokia.

Some analysts were positive on Google's effort to continue to establish the Android as a popular operating system for smartphones and wireless devices.

"It will help them keep consistency for Android platform," said Jim McGregor, Chief Technology Strategist for In-Stat.

The new phone helps Google "get their partners all on developing a single platform that applications can be developed on."

 

 

Motorola, which is banking on the Android system to power a new generation of smartphones to revitalize a flagging business, said on Tuesday it welcomed the competition. Co-Chief Executive Sanjay Jha told Google's audience he did not see the Nexus One as a threat, but as an expansion of the market.

Google worked closely with HTC to develop its phone, which uses a 1 gigahertz Snapdragon processor from Qualcomm Inc. The Nexus One is 11.5 millimeters thick and weighs 130 grams -- which executives said was lighter than a Swiss Army knife and no thicker than a No. 2 pencil.

 

The phone will feature a 3.7-inch (9.4 centimeter) touchscreen display. It will run the 2.1 version of the Android operating system and feature OLED display technology, a trackball for user interface control, an accelerometer chip, and a 5 megapixel camera.

(Writing by Gabriel Madway; Editing by Edwin Chan, Phil Berlowitz)

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Tweets, sexting "unfriended" in U.S. banned word list

Tweets, sexting "unfriended" in U.S. banned word list

 

KANSAS CITY (Reuters) - If you recently tweeted about how you were chillaxin for the holiday, take note: Fifteen particularly over- or mis-used words and phrases have been declared "shovel-ready" to be "unfriended" by a U.S. university's annual list of terms that deserve to be banned.

After thousands of nominations of words and phrases commonly used in marketing, media, technology and elsewhere, wordsmiths at Lake Superior State University on Thursday issued their 35th annual list of words that they believe should be banned.

Tops on the Michigan university's list of useless phrases was "shovel-ready." The term refers to infrastructure projects that are ready to break ground and was popularly used to describe road, bridge and other construction projects fueled by stimulus funds from the Obama administration.

And speaking of stimulus, that word -- which was applied to government spending aimed at boosting the economy -- made the over-used category as well, along with an odd assortment of Obama-related constructions such as Obamacare and Obamanomics.

"We say Obamanough already," the LSSU committee said.

Also ripe for exile is "sexting," shorthand for sexy text messaging, a habit that has caused trouble this year for public figures from politicians to star athletes.

Similarly, list makers showed distaste for tweeting, retweeting and tweetaholics, lingo made popular by users of the popular Twitter networking website. And don't even get them started on the use of friend as a verb, as in: "He made me mad so I unfriended him on Facebook," an Internet social site.

Male acquaintances need to find another word than "bromance" for their friendships, and the combination of "chillin" and "relaxin'" into "chillaxin" was an easy pick for banishment.

VOTED OUT

Also making the list was "teachable moment."

"This phrase is used to describe everything from potty-training to politics. It's time to vote it out!" said one list contributor.

"Toxic assets," referring to financial instruments that have plunged in value, sickened list makers so much the phrase was added to the list, along with the tiresome and poorly defined "too big to fail" which has often been invoked to describe wobbly U.S. banks.

Similarly, "in these economic times" was deemed overdue for banishment due.

Also making the list -- "transparent/transparency," typically used, contributors said, when the situation is anything but transparent.

One list contributor wanted to know if there was an "app," short-hand for "application" popularized by the mobile iPhone's growing array of software tools, for making that annoying word go away.

And rounding out the list -- "czar" as in car czar, drug czar, housing czar or banished word czar.

"Purging our language of 'toxic assets' is a 'stimulus' effort that's 'too big to fail,'" said a university spokesman.

(Editing by Cynthia Osterman)

READ MORE - Tweets, sexting "unfriended" in U.S. banned word list

AKR, Petronas may distribute more fuels

Alfian ,  The Jakarta Post ,  Jakarta   |  Tue, 12/29/2009 8:32 AM  |

 

PT AKR Corporindo and PT Petronas Niaga Indonesia, two firms selected to join PT Pertamina in distributing subsidized fuels in 2010, may distribute more subsidized fuels in the following years, says the  regulator.

While the tender for subsidized fuel distributors is carried out every year, both AKR and Petronas have a major chance to be selected again for 2011 and beyond, having been selected as the distributors for 2010 , giving them the edge over other rivals for the future, in term of expertise and distribution networks, said downstream oil and gas regulator BPHMigas on Monday.

"Whether they will get more subsidized fuel quotas in the following years pretty much depends on their readiness with infrastructure," BPHMigas's chairman Tubagus Haryono said in the appointment delivery ceremony in Jakarta on Monday.

During the occasion, Pertamina, AKR and Petronas were officially assigned to distribute subsidized fuels next year,  which will be the first time that private companies have been involved in the subsidized fuels business, which has long been monopolized by the state oil and gas company Pertamina.

Although AKR and Petronas have been selected to assist with the distribution of subsidized fuels, which happens at national level, they can only distribute the fuels in limited volume and in limited areas under the present arrangements.

The government and the House of Representatives, through the Law on the 2010 state budget, have established that the quota for subsidized fuel distribution next year will be 36,504,779 kiloliters, which will include 21,454,104 kiloliters for Premium gasoline; 3.8 million kiloliters for kerosene; and 11,250,675 kiloliters for diesel.

Most of the quota will be distributed by PT Pertamina. AKR is only allowed to distribute 56,500 kiloliters of diesel per year in Deli Serdang, Medan, Central Lampung, South Lampung, East Lampung, North Lampung, Bandar Lampung, Banjar Masin, and Pontianak.

Petronas is only allowed to distribute 20,440 kiloliters of Premium gasoline per year in four fuel stations in Medan, North Sumatra.

Tubagus said that, besides the infrastructure, the commercial aspects would also help to determine whether the two companies would get additional quotas or not.

As for this year's  assignments, both AKR and Petronas said they were ready to distribute the subsidized fuels.

"Starting from the first January 2010, we are ready to distribute the subsidized fuels. All our outlets have been audited by BPHMigas," AKR's president director Haryanto Adi Koesoemo said.

Pertamina's president director Karen Agustiawan said the presence of AKR and Petronas in the subsidized fuels distribution business would be good for Pertamina as this would make the business more competitive.

"Now we have competition in subsidized fuel distribution. I hope that Pertamina's team would  do better in doing this job," she said.

Director general for oil and gas Evita H. Legowo emphasized that AKR and Petronas must give priority to buy the fuels from domestic refineries.

"We know that the outputs from domestic refineries are still small, but we want this to be used optimally. We don't want to see that AKR and Petronas import the fuels, while at the same time Pertamina wants to export the fuels from their refineries," she said.

Tubagus said all subsidized fuel distributors were required to report their sales volume on a daily basis in a bid to provide and monitor up-to-date figures on the consumption of subsidized fuels.

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Nokia opens new front in Apple patent battle

Nokia opens new front in Apple patent battle

 

 

HELSINKI (Reuters) - The world's top mobile phone maker Nokia launched a new patent broadside against Apple, escalating a battle for control of the smartphone market that has already led to a flurry of lawsuits.

Nokia filed a complaint with the U.S. International Trade Commission (ITC) on Tuesday alleging that Apple infringes Nokia patents in "virtually all of its mobile phones, portable music players, and computers" sold.

The seven patents at issue relate to Nokia technology being used by Apple to create features in user interface, camera, antenna and power management technologies, it said in a statement.

A Nokia spokesman said the firm expected the ITC to decide whether to pursue the case in around 30 days. Any possible injunction against the sale of Apple products with regard to the alleged patent infringement would not happen until early 2011.

Apple was not immediately available for comment.

The ITC action is the latest step taken by Nokia to fight off fierce competition from Apple, with the inclusion of the U.S. firm's iconic iPod and iMac products in the complaint marking an escalation from previous patent claims.

Both firms had earlier this year launched patent infringement suits against the other.

Nokia shares closed 0.5 percent higher in Helsinki at 8.85 euros, while Apple shares traded 0.7 percent lower at $210.11 at 1635 GMT in New York.

TIT FOR TAT

Analysts say the dispute, potentially involving hundreds of millions of dollars in annual royalties, reflects the shifting balance of power in the mobile industry as cellphones morph into handheld computers that can play video games and surf the Web. They have said it could take years to resolve.

Relative newcomer Apple trails the Finnish firm in cellphone shipments, but has gained a lot of ground against the market leader in the smartphone segment thanks to the iPhone.

Apple, which entered the industry in mid-2007, overtook Nokia last quarter as the cellphone maker generating the highest total operating profit.

In October Nokia said it had filed a lawsuit in the U.S. state of Delaware, accusing Apple of infringing 10 patents and trying to hitch a "free-ride" on Nokia's technology investments.

This month Apple struck back, saying Nokia infringed 13 of its patents and accusing the Finnish firm of anti-competitive practices. Nokia said the countersuit did not change anything fundamental in its own case.

(Reporting by Brett Young; editing by John Stonestreet)

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