Google CEO Larry Page just made his first quarterly earnings call after taking over the helm from Eric Schmidt, and he had good news: Google recorded a quarterly profit of over $9 billion, a company record. Page attributed the huge gains to Google narrowing its sprawling presence and pushing its most successful products harder.
As Page said according to a Tech Radar report, “Greater focus has also been another big feature for me this quarter. More wood behind fewer arrows.”
Google, while having launched the already successful Google+ network, has eliminated some of their products that either weren’t performing or strategically didn’t have much chance for success. This is a change for a company that previously seemed to make sure its hands were in every nook and cranny of the Web.
“Last month, for example, we announced that we will be closing Google Health and Google PowerMeter,” Page said. “We’ve also done substantial internal work simplifying and streamlining our product lines. While much of that work has not yet become visible externally, I am very happy with our progress here.”
With the bulk of the company’s revenues still coming from ads, a big question for Google is how it will monetize its free services with huge user bases, such as YouTube, Chrome and even Google+. Page said that, while they do offer important potential revenue streams, building a massive user base will always be successful in the long run, and it’s not worth it for Google to risk that in the search for short-term profit.
“People rightly ask ‘how we will monetise these businesses?'” Page said. “And of course I understand the need to balance the short term with the longer term needs because our revenues and growth serve as the engine that funds our innovation.
“But our emerging high usage products can generate huge new businesses for Google in the long run, just like search and we have tons of experience monetising successful products over time.
“Well run technology businesses with tremendous consumer usage make a lot of money over the long term.”
Page said his next move for Google is to divide the company into three more distinct spheres. In the first are Google’s search and advertising ventures, which at this point are relatively mature and still provide the company with most of its income. In the second are more consumer-based products, like Android, Chrome and YouTube, which are all succeeding greatly but still require a heavy amount of investment and innovation. In the last are new, emerging services such as Google+. With those spheres, or circles if you like, it looks like Page is trying to put more emphasis on driving products from cutting-edge to long-term maturity, rather than Google’s old strategy of doing everything cool they could think of at once. With this quarter’s numbers the best ever, it looks like it’s a strategy that’s working.
“”Overall, we are focused on long term absolute profit and growth, as we have always been — and I will continue the tight financial management we have had in the last two years, even as we are making significant investments in our future,” Page said.
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