Google - Oh My

Google posted the following numbers yesterday:

Quarterly revenues - $2.25bn, up 79% year over year
Quarterly EBITDA - $1bn - up 86% year over year

Now let's just take a second to comprehend those numbers.

We are witnessing a business that is approaching $10bn in annualized revenues growing at 80% year over year.

And we are looking at a business with operating margins of almost 50%.

A former colleague at Flatiron, Steve Miller, once asked me what do I look for in business models.  I told him "high margin businesses that can grow rapidly".

If that is the definition of beauty, then Google is the prettiest P&L that I have ever seen.

Earlier this week, Comscore put out the March search market share numbers which showed Google gaining share and the others losing share.  There was a lot of debate about the accuracy of these numbers, particularly from the companies that are shown losing share.

I think the Google quarterly numbers might cause that debate to die down.  It's clear that Google is a juggernaut right now which is getting harder and harder to compete with.

Enter eBay.  It's being reported on the WSJ website that eBay is in talks with Yahoo! and Microsoft regarding some kind of alliance to ward of competitive pressure from Google.

Longtime readers of this blog know that I am not a Google lover. I would prefer a market with a more level playing field.  In particular, I'd like to see Yahoo! step up its competitive pressure on Google.

But the only thing I can do this morning is shake my head in wonderment at those amazing numbers.

Comments

[David Dundas]

It is nuts I totally agree. Google took a beating PR wise with the privacy, china, and then the PPT leak... but it is an amazing company. I do think however Microsoft is a sleeping giant that is just waking up.

[howard Lindzon]

Good points. I take a slightly differnet look at the greatness of Google as well.

[Arnie McKinnis]

At the point that eBay, Yahoo! and Microsoft have to ban together to fight off Google is the point at which they begin to loose even more market share. There are only two ways you can benefit here - draft behind Google or exploit market white space. It's starting to look alot like the "Joes vs. Pros" show!!

[steve]

as far as eBay & new friends versus google, if ebay and amazon could stop buying traffic from google, google’s revenues would shrink by, what, 50%?

read ebay’s and amazon’s public filings and you’ll how much they spend on marketing — billions and billions and billions. and where do they spend it? not on 30 second TV spots, that we know. not on major print campaigns, that we know (except for amazon’s occasional sunday paper couponing).

no, they spend those untold billions on the web. and where on the web? duh. on google. they obviously get great value from google, but heck, if you’re worried about google killing you, you should probably consider ceasing your own funding of their arming for war against you?

[Brian]

The 80% growth rate applies to where the company was when it grew, not to where it is now, or even will soon be. ($10B).
GOOG was roughly a $4B company a year ago when it grew at 80%.
Obviously still huge, but don't exaggerate $4B to $10B.