Google, When Great Isn't Enough (GOOG)

Google Inc. (NASDAQ: GOOG) reported earnings of $6.79 EPS on revenues of $4.95 billion in revenues.  Thomson Reuters has estimates for the online search leader at $6.50 EPS and $4.92 billion in revenues.  The net revenues before taking out the traffic acquisition costs were $6.67 billion.  That puts traffic acquisition costs at $1.72 billion, or about 27% of advertising revenues.

Google ended with cash and cash equivalents of $24.5 billion at the end of the year.  The company also had 19,835 full-time employees, up from 19,665 full-time employees one quarter ago.

Google gives no formal guidance.  This translated to 17% revenue growth over last year’s period and CEO Eric Schmidt says the global economy is still in the early days of recovery.  He further added, “As we enter 2010, we remain hugely optimistic about the internet and are continuing to invest heavily in technological innovation for the benefit not only of our users and customers, but also the wider web.”

Google-owned sites generated revenues of $4.42 billion, or 66% of total revenues… that is up 16% from Q4-2008.

International revenues were $3.52 billion, representing 53% of total revenues in the fourth quarter of 2009, compared to 53% in the third quarter of 2009 and 50% in the fourth quarter of 2008.  Revenues in the fourth quarter of 2009 would have been $112 million lower without a Forex gain.

Paid clicks to ads on Google sites and the AdSense partner sites rose 13% year over year and 9% sequentially.

Google expects stock-based compensation charges for grants to employees prior to January 1, 2010 to be about $1.2 billion for 2010.  The company does see expanding via acquisitions and via capital spending.

Google closed up 0.4% at $582.98 during the normal trading day, yet shares are getting waxed in the after-hours session.  Shares are down around $554.00 in the after-hours session at 4:14 PM EST.  We had noted in our preview that options traders seemed braced for a move of up to $25.00 in either direction, which means shares have moved slightly more than what they were expecting in options.

JON C. OGG