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Google's 3Q Conference Call notes

|Includes: Alphabet, Inc. Cl C (GOOG)

Bear with me, I am posting some stuff that is not up-to-date, Google's Conference call was more than a month ago. But I copied down the parts I found interesting.

• So we're very optimistic now about the future. We now have the business confidence to invest heavily in the next phase of innovation, hoping to invent the future as we see it.
• Mobile, a high-growth business for us already. 30% quarter-over-quarter growth in mobile searches in the third quarter.
• Android, as you know, has come a long way in a year, from one device with one carrier in one country and now 12 devices in 26 countries with 32 carriers with much more coming.
• but also we're going to focus more on strategic deals and acquisitions, as we have discussed publicly. And we're open for business in making strategic acquisitions, both large and small.
• At, for example, the revenue was up 8% year-over-year to $4.0 billion, contributing a significant portion of our year-over-year growth
• Turning to our geographic performance, revenue from the U.S. was up 4% year-over-year to $2.8 billion. International revenue accounted for 53% of our total revenue
• (Explaining why overall Cost Per Clicks declined) Second is, don't forget that we have quite a good healthy growth in international markets, which are, in many cases, lower CPC but they add dollars. So we're not worried about lower CPCs and when you get dollars and more performance. So this would be at the highest level. It's that more of the clicks are coming from countries with lower CPCs. So we always want to caution you about not reading aggregate CPC metrics as a direct reflection of price changes.
• Let me just add. Android adoption is literally about to explode. You have all the necessary conditions. You have the vendors, you have the distribution, and so forth. And this of course is a very critical period with all of everything being delivered and new announcements as well.
• YouTube is on its path to profitability in the not-too-distant future.
• but just to give you one sound bite, we are monetizing more than a billion video views every week on YouTube.

“What are the plans for Google's large cash balances? Are stock buybacks being considered at any point?”
Eric Schmidt
“Patrick and I were talking about who should answer this question. We have been doing very well in the cash generation front, throughout this whole year, which is a critical year. We have been able to be very strongly cash flow positive and we hope that that will continue for a long time. We love cash. The issue with stock buybacks is historically they have often not achieved the objective that they've set out. So they are certainly none under consideration right now and I wouldn't expect any time soon. I wouldn't rule one out but I would not put it on your list of things to anticipate any time soon. From our perspective the cash gives us a lot of operating and strategic flexibility over the very long term and so we are very happy to have it sit in our bank account and earn modest interest rates.”
• To me this makes sense; stock buybacks are for mature companies that are not planning on taking advantage of the kind of innovative growth that is available through acquisitions and strategic investments into early/ developmental/ high technology fields. To buy back stock for a tech company is the lazy way to increase EPS, and will not stimulate the same growth metrics as strategic investments and acquisitions.

Disclosure: Long Goog