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Tom Forte, Telsey Advisory Group internet analyst, weighs in on the early Google earnings report released accidentally this afternoon.
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Right yeah.
I for -- that we're doing right now -- Tom Forte Internet analyst with tells C advisory group.
Tom my head spin and I can't even imagine what your head is doing -- all this burst well what do you think of all this this.
Premature release.
The -- but say that sure I think it's you know it's pretty surprising that the numbers came out one -- market was still open -- -- fully anticipating to a report after the market closed today.
So that was kind of the first surprise.
And then the second surprise -- these numbers are -- actual numbers they -- much weaker than anticipated.
So to surprises -- -- -- But do you believe the numbers because they haven't confirmed or denied them at this point if in -- if in fact you do you believe them.
They're not pretty at all I mean you have click cost per click down 15%.
Traffic acquisition acquisition costs up their amortization expenses are higher clearly is some of this has to do with the purchase of Motorola mobility -- Yeah basically yeah let's assume that the numbers are correct I think there's two things at play.
Google -- managing the transition from a desktop laptop Internet to a mobile Internet this has been putting -- -- of tremendous pleasure of their cost per click.
And then this is the first quarter that they're reporting results for Motorola mobility.
We already knew that they're laying off.
20% of staff there so we didn't expect really good numbers out of that Syria has I think there's you know two challenges in the quarter and I think those challenges are real.
Senate and -- is Simpson had been at numbers are correct you're not surprised by then you're expecting them to get -- a little bit.
This quarter anyway.
So the way that I thought about the quarter was for the second quarter.
Google reported a 1% sequential improvement in cost per click for the amount of money they get when someone clicks on an advertisement a search result advertisement.
That number trip to a negative 3% in this quarter.
Which really just suggest to me that the transition again from desktop laptop the mobile is a tough transition for Google.
And to expect pressure on the cost per click for.
At least an extended period of time.
The stock has been on -- -- are do you think that this transition.
Too Smart phone usage in and the like will hurt that continue momentum.
I definitely do so I think if you look at the second quarter they reported that 1% sequential increase prior to -- today the stock -- 125%.
I think there are some other factors contributing to that run but in my mind the main reason was the light at the end of the tunnel on cost per click.
And now it looks like there's still some challenges there.
They still have Google+ which.
Many will argue much better than FaceBook.
Better -- regard.
OK very -- so there's that what about the EU position on privacy that's certainly something that's weighing on Google.
Yeah I do think that you know the there's every chance that you know the EU or someone else.
Might punish Google.
-- potentially putting their search results for their own properties above those of others and I think that's a risk for the stock but that's been in the stock -- -- -- a little while.
Fair enough there awesome moving into the cloud.
You think maybe that's a way they can play this well.
I think there are a lot of opportunities for Google and I think that you know generally speaking they're doing a really good job of -- managing their business certainly the clouds another opportunity.
-- you -- I think spent a positive for the stock yet and not positive and I think the numbers are going to be good as well.
I mean at this moment it's -- -- it's hard in the stock is halted still.
Would you buy into Google right now.
I actually I wouldn't I mean are covered company list right now are two favorites are on eBay Liberty Interactive.
And of our covered companies -- those least favorite.
So I'm very happy with eBay's results yesterday I'd be a buyer -- bank.
Not so much of Google like take it you worry that -- pages help at all.
Now I don't I think that he he appeared at Google's identity of -- earlier this -- -- I think is okay.
And I think he's doing a fine job running the company some not so worried about that now.
Tom Forte with tells C advisory group banks are playing -- -- there's vagueness.
-- -- -- the call it.
As good a lesson that some think Tom thank you very -- my pleasure.
