Concerns Over Google's Earnings Results Are Way Overblown
- Google missed on both top and bottom line, which is in-line with historical trends.
- The miss in earnings and sales is driven by the unpredictability of the ad-business model and also because Google provides limited financial outlook/guidance.
- CPC (cost-per-click) trends have started to stabilize, and improvements in measuring marketing ROI may have helped stabilize pricing.
- Expenses have trended higher as Google tends to hire more aggressively in Q3, whereas CAPEX has trended higher in anticipation of headcount increases and data center needs for its various websites.
- Google remains a compelling growth investment despite the various competitive challenges that it currently faces.