CEOs Discuss the Internet: Google, Time Warner, Verisign, Keynote, Infospace

by: SA Editors

Quotes from CEOs and CFOs on recent earnings conference calls, discussing their companies and markets:

Google Inc. (NASDAQ:GOOG)

Eric Schmidt - CEO

Business continues to be very, very good here at Google and we are very happy to present another very strong performance from the company...

Global expansion of Google: it turns out that we are gaining share, according to most third-party data analysis, in almost every country. Our international businesses have contributed a significant financial component to our revenue, our profits, as well as our advertising and we expect that to continue. What is interesting is we are also beginning to develop the partnerships that are appropriate for a global company. So for example, we did our first large access deal with BSkyB in the United Kingdom in the same quarter.

Our focus around new product development, 70/20/10 and the other things that we've talked about, has continued and indeed our leadership in search and ads continues; it's always wonderful. We have a much larger, higher quality search index in essentially all languages. We continue to search new types of content: books, code, patents, news archives, in all sorts of interesting new ways. We are showing fewer ads per search on a much higher quality and much better monetization. So again, the targeting and the technical work that we are doing is producing better return for advertisers, better revenue for us, with even fewer advertisements on a comparison basis. We are experimenting with new ad formats.
Google is the innovator in many online products: maps, personalized home page, docs and spreadsheets and our products there. We are doing very, very well in mobile search. Of course, we have a very thorough and complete prioritization process that now allows us to understand how to deploy all these resources going forward.

Time Warner Inc. (NYSE:TWX)

Dick Parsons – Chairman, CEO

On the digital front, is the number one online news destination, with more than 20 million unique visitors per month, and over 1.4 billion average monthly page views, which is ahead of all of its competition, including the portals. a joint venture between Turner and Time Inc. which was launched only a year ago, is already the leading standalone vertical finance site...

Now to AOL, our second strategic priority for last year. During the year, we repositioned AOL as a primarily advertising-driven business and this strategic shift has already yielded strong financial results. AOL's ad revenue grew 49% in the fourth quarter, and 41% for the full year, to reach a total of almost $1.9 billion. For the last nine months of the year, we believe our ad growth was faster than the industry average, which of course means that AOL was taking share for the first time in many years.
We know that when our valuable tenured subscribers switch to free, we are maintaining the vast majority of their usage. We're also signing up a lot of new users. Although it's still early, we believe we're on track to reach the long-term goals we set forth last year when we made this shift in strategy. To remind you what they were: we said that we would begin to grow AOL's page use again in 2007 and that we would grow online advertising at or above the domestic industry rate going forward; and that we would grow our adjusted OIBDA at AOL.

We are successfully through the first six months of executing against that strategy, and our new management team is totally focused on laying the groundwork for continuing this success. While 2007's results rely largely on maintaining the base of usage that we already have, future growth will be more dependent on garnering incremental usage. Accordingly, AOL management is committed to insuring that the organization's composition and orientation is designed to create and deliver compelling new products to build AOL's audience and usage going forward.

VeriSign, Inc. (NASDAQ:VRSN)

Stratton Sclavos - Chairman, President, CEO

Let's now move to the Internet Services Group. The ISG group contains our information and Security Services businesses. During the fourth quarter, we processed approximately 6.2 million new registrations for .com and .net domain name. We also saw another 9 million names renewed or extended, adding up to 15.2 million domain name transactions in the quarter, up 30% from the year ago period. Renewal rates remained strong as well coming in it 77% for the quarter. VeriSign's adjusted base of active names at the end of the period stood at 65 million, up 6% sequentially and 30% year-over-year. Remarkably, our ATLAS infrastructure is now handling an average of 25 billion DNS requests per day. As expected, we also received Department of Commerce approval for our new .com contract with ICANN. Just to recap the facts, VeriSign and ICANN signed a new agreement which extends our contract for operating .com through 2012 and provides for much clearer processes for new product introductions, pricing changes and contract renewals.

Keynote Systems, Inc. (NASDAQ:KEYN)

Umang Gupta - Chairman & CEO

Total first quarter revenue reached $15.8 million increasing 15% compared to the same period last year. Total net deferred revenue reached $14.7 million, increasing over 140% compared to the same period last year. And our gross deferred revenue, defined as sum of net deferred revenue and unpaid deferred revenue, reads $23.6 million, up 185% compared to the same period last year.

When one looks at our gross deferred revenue increase during the past quarter of almost $12 million, that's 83%, it is important to realize that Keynote did even better in terms of new business growth in this past quarter than was reflected purely by our GAAP reported revenues of $15.8 million. Much of this increased deferred revenue will flow through to our topline results in the coming quarters...

InfoSpace Inc. (INSP)

Jim Voelker - Chairman and CEO
Revenue in the fourth quarter was $89 million, below our guidance of $91 million to $93 million and up 3% over the same quarter last year. Our mobile revenues were in line with our expectations, we experienced lower than projected online traffic and monetization in the quarter. The majority of the shortfall is attributable to our removal of poorly converting distribution traffic from our network. However we also have lower than expected performance on our owned and operated sites. Our balance sheet remains strong. We ended the year with $402 million in cash and no debt...

Although we're disappointed with the fourth quarter results, InfoSpace's online business is solid with great products, a proven business model and strong partnerships with distribution and monetization. In October, won the prestigious J.D. Power and Associates Award for the highest customer satisfaction across all search engines. Dogpile scored top ratings in all three categories; ease of use, functionality and results. We were not really surprised as independent studies have proven that our meta-search technology consistently yields a higher search success rate, than all the major engines. And the major search engines are diverging in how they search; Google, Yahoo!, Ask, and MSN use fundamentally different methodologies to crawl the web. In fact, about 85% of first paid results are unique on the major engines. As the leading meta-search provider, this enhances the value of our offering as we assemble an ever expanding and more relevant set of results.

Our distribution partners benefit as well, as we consistently monetize better than any single engine, while delivering a great user experience.

In the fall, we extended our technology to a new brand, the kid friendly search site, Zoo offers children the opportunity to experience the wealth of education, in form of a fun material on the Internet, while filtering adult and other inappropriate content.

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