“The financial results of a market segment leader indicates the trend of the entire market”
Mihai Seceleanu (photo), managing director of InternetCorp said the fourth-quarter earning report made public by Google last week is showing signs of online advertising market’s “healthy condition”.
“The positive Q4 earnings will have a positive impact on online advertising industry. Google’s financial results are only reiterating the facts examined so far – the fact that the communication and media industry is one of the least affected markets by the increasingly difficult economic environment, as more and more companies are seeking to boost their online advertising spending”, said Mihai Seceleanu.
Google reported 382.4 million dollars net income, or 1.21 dollars on 317 million diluted shares outstanding compared to 1.2 billion dollars in the third quarter of 2008 or 3.79 income per diluted shares in 2007. The net income included one-time charges of 1.09 billion dollars to account for the declining value of Google's investments in Clearwires and the AOL unit of Time Warner.
Profit, excluding those write-downs and items like stock-based compensation, was 5.10 a share, beating analysts expectations of 4.69 dollars/share.
Overall, Google recorded an increase of 18% to 5.70 billion compared to 4.83 billion dollars in fourth quarter of 2007. Excluding commissions, the net revenues rose to 4.22 billion dollars, above analysts projections of 4.12 billion dollars.
The giants of Internet realms who focus more on display advertising, such as Yahoo, are expected to report a weaker performance than Google. Yahoo will report its financial results on Tuesday, January 27.
A first measure to curtail costs, adopted by the new CEO of Yahoo, Carol Bartz was to freeze employee pay in an attempt to avoid new layoffs.
“The coming period may be more difficult than we expect”
Google’s financial report is a gauge of the online advertising market, as it owns more than half of the global industry, whereas the coming period may be worse than we expect, said Orlando Nicoara, managing director at MediaPro Interactiv.
Clement Nicolaescu, marketing &PR director at ARBOinteractive, said the financial results reported by Google will have no major impact on the online advertising industry.
“In late 2008, the online advertising market felt the negative effects of the financial crisis. It was impossible for Google to remain without a scratch. The fact that the online advertising market has a negative or positive feedback given the general economic situation, it can be considered as a sign of health for the industry”, said Nicolaescu.
Cristi Parvan, interactive media director at Zed Digital, part of Zenith Media, said Google’s financial results are signs of confidence in the online landscape.
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