The quarterly corporate earnings period has rolled around, and it’s time once again to listen in on analysts’ calls with companies such as Apple, Google, Intel, Microsoft, and Samsung for clues about the future of some of the world's tech giants. The season opened with Intel's financial statements last Thursday, and Apple's earnings announcement is expected Wednesday. Tuesday was reserved for the world's most popular search/smartphone OS/driverless car company, Google.
What did Google's fourth-quarter earnings call offer beyond the company's reported $14.42 billion in revenues for the most recent three-month period? Hints about when to expect Google to really get into overdrive with Motorola; the future of Android as an infotainment system; Google's importance as a predictor of U.S. Senate elections; and the future of Google, not as a search provider, but a knowledge company.
Motorola isn’t influenced by Google, yet
Have you wondered why Google hasn't come out with a blockbuster phone from Motorola Mobility yet despite buying the Android smartphone maker for $12.5 billion in 2011? Here's your answer: “We inherited a 12- to 18-month product pipeline that we're still working through,” CFO Patrick Pichette said during Google's earnings call Tuesday. In other words, Google is rolling out Motorola devices that were in development before the search giant took over the company. Given that Google took control of Motorola a little over six months ago, we may be waiting for Google-influenced Motorola handsets until at least late 2013 or early 2014.
High hopes for YouTube
YouTube fans watched more than 4 billion hours of video per month during 2012, Google’s chief business officer, Nikesh Arora, said during the call. Google has high hopes for YouTube's future thanks to the site's recent redesign that focuses on “channels” or single YouTube accounts instead of single videos. The hope is that viewers will come back for more from their favorite YouTube content creators. “YouTube is well positioned for the changing viewing habits of today's multi-screen world,” Arora said.
Arora didn't hesitate to give the company credit for the popularity of the song Gangnam Style, the most-watched video in YouTube history, by Korean pop sensation PSY. Arora also suggested that YouTube played a big part in lining PSY's pockets with Gangnam Style dollars. “Outside estimates say that...Gangnam Style, now the most-watched YouTube video of all time, it generated over $8 million in all-in advertising deals,” Arora said. Given the casual, and somewhat rambling nature of Arora's statement, it's not clear if he was saying that PSY and his team made more than $8 million from YouTube, as many other outlets are reporting, or if YouTube revenues were part of an overall estimated $8 million earnings for the song.
Regardless, Arora sees a bright future ahead for YouTube stars and said that “thousands of [YouTube] channels are now making six figures annually.”
Car companies including Renault and Saab have tried their hand at creating an in-car infotainment system based on Android. But Google has yet to come up with a version of Android designed to run apps from your car's dashboard. CEO Larry Page gave a slight hint about when you might expect an official infotainment system from Google. Page's statement will be disappointing for Android fans in the short term, but fairly exciting overall.
“Android won't be used in cars probably before we get automated cars into the mainstream,” Page said, referring to Google's driverless car initiative. In other words, Google doesn't look set to come out with an Android car kit anytime soon.
Page also expounded a bit on Google's hands-free driving experience and what the future holds for the real-world successors to make-believe cars such as Kitt and Herbie the Love Bug. Google’s chief executive said the company was looking, in the long term, at using automated cars as a way to reduce parking requirements at the Google campus. And, at some point, maybe even the rest of the world. As a former resident of New York City who only moved his car on street sweeping days and to leave town, ending the need for parking is an idea I can get behind.
Beyond the blue links
I've probably referred to Google as “the search giant” more times than I can count, but I may soon have to change that reference to “the knowledge giant.” It's been said many times that Google's self-declared mission is to organize the world's information and make it useful. But Page emphasized just how far Google is trying to push its search product beyond entering keywords and a results page filled with little blue links.
In 2012, the company rolled out its Knowledge Graph product that displays a condensed data summary of what it thinks you're looking for on the right-hand side of the results page. So if you search for inventor Nicola Tesla, you get his brief bio, published works, and a list of similarly famous scientists. If you search for The New York Yankees, you get a brief description of the team, its World Series championship years, nicknames and current roster.
In 2012, Google also introduced Google Now for Android 4.1 Jelly Bean devices and up. Google Now is a predictive service that tries to automatically deliver information to you based on your GPS location, and data from your Gmail inbox, Google calendar, and Web search history. If you are traveling from Seattle to New York via Houston, for example, Google Now may display your flight times, and the weather forecast for each of your destinations.
Beyond Google Now and Graph, Page says Google is also working to improve its voice search capabilities for Android.
Google is not the only company trying to push online search forward. Bing recently beefed up the social sidebar on its results page to offer relevant data from Facebook such as status updates and shared links from friends, as well as information from Twitter, Quora, Klout, Foursquare, and Google+. Bing in 2012 also added a new handy module to the right side of its results page called the snapshot that features so-called “actionable” information. The snapshot is supposed to make it easier to find information such as hotel rates, maps, online reservation tools, and restaurant reviews.
Facebook also made an important move into search recently with its natural language Graph Search feature that helps you surface data from your friends' profiles and publicly shared information from other users. You can use Graph Search to ask questions such as “show me TV shows my friends like” or “restaurants in New York City that my friends like.”
Google's political influence
Political hopefuls looking to get elected during the 2014 congressional elections take note: outspend your candidate on Google. That was the implication from CBO Arora during the earnings call. “Here is an interesting statistic for you,” Arora said. “In nine of the top 11 Senate races for the U.S., the candidate who spent more with Google was elected.” If this trend holds up, assuming it's accurate, it may branch out into other elections beyond the Senate. Perhaps Google ad spending will one day join the list of other bizarre presidential election predictors such as sales of presidential candidate Halloween masks, the Scholastic News election poll, and the last regular season home game of the Washington Redskins.
While Google had a lot to say about Android, search, and YouTube, the company's social network Google+ was not singled out for discussion during Tuesday's earnings call.