Google Q1 Earnings Report—Fears Were Overblown

Google reported earnings for the first quarter. The fears of a meltdown were overblown. Revenue was $5.2 billion, up 42 percent year-over-year and up 7 percent from the fourth quarter in 2007. After traffic acquisition costs (what Google pays its publisher partners) revenues directly to Google were $3.7 billion. Net income for the quarter was $1.31 billion, up 8 percent from the fourth quarter.

The earnings call is about to start. Here are my notes:

Eric Schmidt: Strategy of search, ads, and apps is beginning to pay off. Actually “transformative” in that it is letting people do things they were not able to before.

We are putting more control in the hands of advertisers. Doubleclick is hugely strategic. Allows us to offer a more comprehensive solution.

The recently announced Salesforce.com partnerships allows us to integrate Salesforce and Google apps. by doing these partnerships and investing in the app model, we think people will be able to do more thinsg online in a way that was not possible before like share documents and calendars.

George Reyes: Results include DoubleClick since the acquisition was complete, but not materials in the quarter. Paid click growth on Google.com remains healthy.

Traffic acquisition costs of $1.5 billion in the Q was 29% of revenues, down from 30% in Q4.

19,156 employees at the end of the quarter, including DoubleClick. 20% (?) of U.S. DoublelClick employees have been laid off, and another 15% are expected to leave. Only in the U.S., Internationally, keeping all the headcount.