Google up strongly after WSJ reports of spending/hiring curbs

Jul. 14, 2015 2:28 PM ETAlphabet Inc. (GOOG) StockGOOG, GOOGLBy: Eric Jhonsa, SA News Editor25 Comments
  • New Google (GOOG +3.3%, GOOGL +2.9%) CFO Ruth Porat is "involved in an internal audit examining costs, revenue and accounting systems," the WSJ reports ahead of the Web giant's Thursday Q2 report.
  • The WSJ also states Google execs are now selecting which teams are allowed to hire new workers - in prior years, teams assumed they could add new staff each year. Moreover, travel, supplies, and events "all require more justification or approvals than in the past," according to two sources.
  • Google's Q1 numbers already suggested the company is slowing down its oft-criticized spending pace: Operating expenses fell to 35% of revenue from 37% in Q4 and Q1 2014. Capex still rose 25% Y/Y to $2.93B.
  • Also: Cowen's John Blackledge is out with a bullish note. He reports U.S. search marketing firm EliteSEM saw its clients' Google ad spend rise 15%-20% Y/Y in Q2, as strong mobile ad growth offset "flattish" PC spending. Blackledge: "Despite declining Desktop search volumes, paid clicks are still doing very well as Google continues to innovate and improve overall conversion." He predicts mobile ad prices will reach parity with PC prices "at some point in 2016."
  • Google is one of the better large-cap tech performers on a day the Nasdaq is up 0.8%. Class A shares (NASDAQ:GOOGL) are up 11% YTD; Class C shares (NASDAQ:GOOG) are up 7%.

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