Google CEO Larry Page his post-earning conference call with investors
Thursday. He spoke less than 400 words, skipped the Q&A session and
left investors in the dark about why the company's operating expenses
increased a whopping 54 percent from a year ago. As thanks, Wall Street
sold Google's stock down 8 percent, which lopped off $15 billion of
market value and set a record for the biggest single-day decline since
2008. Ouch! What did Page do wrong? Here's a tip sheet from business
writers and Wall Street analysts on surviving the dreaded earnings call:
1. Don't miss the Q&A session After saying hello
and how "excited" he was about Google's "momentum," Page departed,
leaving Google CFO Patrick Pichette, SVP of engineering Jeff Huber, SVP
of ads Susan Wojcicki and two newcomers to speak for the company. "We
would have wanted Larry to stick around for Q&A," said Citi analyst
in a note to investors. Citi downgraded Google's stock with Mahaney
citing Page's "token appearance" as another low point of the first
quarter.
2. If you are going to miss the Q&A, don't show up at all Because Page had nothing of substance to say, other than it was a "tremendous" quarter, Fortune's and TechCrunch's say "he would have been better off not even appearing at all."
3. Talk about the future direction of the company With Page taking over as CEO for Eric Schmidt,
investors are worried about what the relatively young CEO has in store
for the company. "Analysts expected new CEO Larry Page to offer guidance
about the way he would run the company," writes at eWeek. "What they
got for their time from Page was a vague two-minute bulletin about how
Google is going great and the new management structure he put in place
is working exactly as planned."
"Maybe (Google) doesn't want to talk about it,
but their multiple is going to go down until they do," said Walt Price,
portfolio manager at RCM Capital Management. "Larry Page's vision would
be a good place to start, and I think people are worried that Facebook
is a giant sucking sound on the valuation of Google and the future of Google." at Forbes says Page has no excuse for not laying out a game plan. "Larry Page
has known he is taking on this role for at least 90 days going back to
February (and probably longer). He should be able to communicate his
strategic vision for Google now," he writes.
4. Don't gloss over current problems Google's cut
into the company's profits in the first quarter. I'd be nice to know how
Google was going to deal with that but neither Page nor the other
executives took the issue on. It was clear from Gleacher and Co.'s Yun
Kim that this concerned investors. "We are somewhat wary of the
company's continued investment in non-search business, which could
accelerate under the new CEO, and also given its recent acceleration in
its core search business," he wrote. "The large jump in expenses that
never really was addressed in the rest of the call by the other
executives sends a message to Wall Street," writes at Forbes, "the
kids are back in charge at Google and they’ll run it any damn well way
they want."
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