Larry Page’s Optimism Fails to Support Google’s Shares

on Jul 19, 2013
Listen Friday July 19th: Google’s (NASDAQ:GOOG) chief executive Larry Page yesterday said that investing in new technologies was core to the culture of the company and led to products such as Google Glass and driverless cars. The CEO spoke at a conference call following the second quarter results announcement, which showed profit below analysts’ estimates and declining advertising prices. Google’s shares declined by 3.96 percent to $874.60 in afterhours trading.

“I look across the portfolio and we are doing quite well, and I am excited about it,” Page commented on the earnings call. When asked about new devices the chief executive said that “certainly over the long term, we’re going to have new kinds of devices and ways of interacting with computing and the Internet.” He added that he was a big fan of Google Glass and using it every day felt to him like he was living in the future.

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Page was also asked when Google’s driveless car initiative would go commercial, to which he responded by saying that the company was working hard to get it running as quickly as possible.
Some Android numbers were revealed during the conference call, notably the 1.5 million of new devices being activated and powered up every single day. That means that the number of total devices using Google’s mobile operating system is growing at a very fast rate. At this pace by the end of 2013 there would be more than one billion devices running Android and by the time of next year’s second quarter announcement that number could have grown to as much as 1.4 billion. Page also said that more than 15 billion applications had been downloaded from the Android store and developers had so far been paid more this year than in the entire 2012.

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Page also said he was very excited about the upcoming Moto X smartphone but gave no further details on the device. Motorola kept dragging Google’s results down in the second quarter, delivering an operating loss of $342 million (₤225 million) compared to $199 million (₤131 million) for the same period last year. The division reduced its full time employees by about a half during the quarter to 4,599 people. Google’s own staff levels increased by 15 percent to 44,777 people.

Gene Munster, Piper Jaffray’s analyst, asked on the conference call about the impact of the expected Moto X phone on Google’s relationship with its partners. Page responded: “We operate Motorola independently. You can see the level of work that’s gone on there to operate that business. I think the team’s been doing a great job, as we mentioned.”

**Google’s share price was 4.11 percent lower at $873.25 as of 19.07.2013, 00.40 BST.**
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To contact the reporters on this story: Alice Young in London at [email protected]; Anton Aleksandrov in New York at [email protected];
To contact the editor responsible for this story: [email protected]


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