Google's Earnings Call: 4 Key Takeaways

NEWS ANALYSIS: Google’s incredibly full plate includes everything from click economics to futuristic glasses. For a big-picture view, one could focus on mobility, search, Android and Google’s Motorola pet project.

Google€™s first-quarter 2012 earnings call was notable for both what executives shared and didn€™t say. In addition to announcing a two-for-one stock split, $10.7 billion in revenue for the quarter and a cash pile totaling nearly $50 billion, there was much talk of the value of clicks and developments in search. With 850,000 Android devices being activated each day, it€™s easy to forget that advertising and clicks are Google€™s primary businesses. However, Android plays an increasingly starring role in both.

CEO Larry Page emphasized his and co-founder Sergey Brin€™s personal investments in Google, their €œenduring love€ for the company, their impatience to make it a company that does €œimportant things€ in the world and the necessity of taking a long-term view to achieve this objective. Below are four more notable points that Page and company touched on during the hour-long call.

1. Searches are going to continue to become more sophisticated, helped by social features like Google+.

Privacy concerns hover over much of what Google does€”amid some controversy, it recently updated its privacy policy€”as personal information is key to Google€™s ability to improve itself.

When asked about Google€™s investments in Google+, and whether the company with the best €œsocial signal€ would be able to offer the best search capabilities, Page€”as he did in a recent €œ2012 Update€ posted to Google€™s Investor Relations page€”gave the example of searching for his friend Ben Smith. Google searching, he explained, has advanced to where it knows enough about a user to understand which Ben Smith, for example, is being searched for, despite the fairly common name.

€œHaving real feedback from users about what they like and don€™t like and things they€™re sharing and so on is very useful for search. We have a lot of those signals already, but we can always use more €¦,€ said Page, according to a transcript from Seeking Alpha. €œI think search is going to change a lot. We€™re going to make it a lot better over the next five or 10 years, just as it€™s changed a lot in the past. And it will include a bunch of those signals and a bunch of other things as well.€

2. As mobile devices become intrinsic to users€™ everyday lives, mobile costs per click (CPCs) are on track to surpass desktop clicks.

During the first quarter, Google€™s average CPC declined by approximately 12 percent, though paid clicks rose by 39 percent. Discussing CPC, Google CFO Patrick Pichette described mobile as still €œcrude,€ and where search functionality was in 2002 or 2004.

But it€™s going to get better and better, said Pichette€”an idea Page agreed with, saying that while desktop is the focus for now, over time he expects the reverse be true, especially with Google increasingly focused on things like Google Offers, Google Wallet and Click-to-Call.

€œIt€™s a lot easier to call someone from your mobile than it is from your computer right now,€ said Page. €œ[We€™re getting] more and more focused on that, both on our sales side, and our customers are getting more focused on that. I€™m very, very bullish on that.€