Google Chats Up Investors

    June 1, 2006
    WebProNews Staff

During a conference call with investors, Google CEO Eric Schmidt and other executives answered questions about their partnerships, rivalries, and products in the industry.

Google Chats Up Investors
When Google Speaks, Investors Listen

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The partnership with AOL is going well, Schmidt responded as the questions got under way during the conference call on May 31. “We are extending the advertising business to include some display partnerships, which we’ve always been contemplating.”

With regards to its expansion, Google will keep that under its direct control. Even though Google has “many more services” it would like to provide, Schmidt said the company still prefers to build its infrastructure rather than enter into agreements to lease it from a service provider.

Jonathan Rosenberg, Google’s VP of product management, responded to a question about which product has exceeded expectations by citing the Keyhole acquisition, which powers the images on Google’s Maps and Earth products. He also noted how this has helped drive Google’s local search advertising business.

He also noted that Google’s Book Search needs to benefit both publishers and advertisers in order to succeed. The more esoteric publications, which do not have the kind of staffing and resources necessary to get in front of a broader audience, will benefit from the service.

Keyword remains the main ranking factor for advertising, and Google is testing whether people are responding to newer ad formats and displays. “Part of our culture is to constantly test these things,” Schmidt said; he also noted that some products which don’t necessarily work great for Google could be offered to partners.

Beta tests of shopping for premium products like iPods from certain merchants using the Google Payments system are not a harbinger of an eBay Express competitor. Instead, it is much more of an advertiser automation service: “Advertisers will see better returns, more click-throughs, and better conversions.”

With the Dell deal, one questioner asked if Dell might involve a barter of hardware for Google services, which Schmidt dismissed. Google does purchase a lot of Dell products though. The six months Google and Dell spent testing the integration of Google’s software with Dell PCs proved helpful in making that ready for Dell customers.

Even though the number of job postings for Google have increased, it doesn’t necessarily indicate Google will hire more people. “We hire the person, not the job, at Google” Schmidt said. Those postings are more of a marketing program to entice people to apply to work at Google.

Real estate has been a frequent executive topic at Google, according to CFO George Reyes. “As the headcount grows, we’re going to continue to add real estate,” he said. Google has acquired more property in the Mountain View area.

Schmidt responded to a question about WiFi by observing how users who move from narrowband to broadband Internet access become heavier users of Google, and they use more advertising services. They are also more likely to purchase Google’s ad products.

By making faster access available with municipal WiFi efforts, Google hopes to drive more usage of its services. “For us it’s a very clear correlation,” Schmidt said. The company also wants to spur broadband usage internationally.

Google does not plan to build a web browser. “The industry is obsessed with this browser question,” Schmidt said. “We have a very active partnership with the Firefox folks.” He anticipates Firefox getting better in response to the debut of IE 7 from Microsoft; Schmidt also cited Safari as a strong browser choice for Mac users.

If a browser with integrated Google products would provide significant user benefit, then Google may consider building one.

Integrating inventory with Google searches, particularly with the rise of click to call, will be important to Google as it continues to develop its advertising products. Rosenberg also cited AdWords and Google Base as ways to provide local businesses the opportunity to get their information in front of searchers.

“Local is becoming an increasingly significant component of our business,” Rosenberg said.

Even though demand for branded advertising products has increased, Google is still looking for the best solution to doing this. Rosenberg did note how site targeting and demographic site selection has helped Google make some progress there.


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David Utter is a staff writer for WebProNews covering technology and business.