Google Revenues Beat Estimates

Despite strong first quarter results, the company's stock slipped on worries about costs.
Google on Thursday reported Q1 2010 revenues of $6.77 billion, above expectations but not enough to shock.

Wall Street consensus was $6.60 per share, according to Thomson Reuters. Google delivered $6.76 per share.

Google CFO Patrick Pichette said in a statement that the company performed well and that it intends to continue investing in innovation for its core and emerging businesses and in its effort to support the open Web.

Nonetheless, Google's shares were down almost 5% in after-hours trading shortly after the company disclosed its financial results, perhaps reflecting lingering uncertainty about the company's prospects in China and/or concern about the company's growing headcount and expenses.

Google hired almost 800 people since December, bringing its total number of full-time employees to 20,621.

In a conference call for investors, Pichette said the company planned to keep hiring to fuel its growth, specifically in support of engineering and sales. "We are continuing to invest heavily in people, products, and acquisitions," he said. "We've already stepped up hiring and we expect to continue hiring through the year."

Though Pichette stressed that Google's hiring standards remain high, he made it sound as if the talent Google seeks isn't easy to find. "Every time I can find another great engineer to add to the Chrome OS platform, I'm going to hire them," he said.

Google CEO Eric Schmidt did not participate in the call. Pichette said not to read anything into this change.

The company's search, display, mobile, enterprise businesses are all strong, said Pichette.

Google's Nexus One, Pichette said, "is a profitable business for us."

The company declined to provide specific sales figures but VP of engineering Jeff Huber said that Google was seeing 60,000 activations of Android phones daily.

Asked whether Google expected to continue to be the default search provider on Apple's mobile devices, Huber said that Google historically has had a strong relationship with Apple and that he hoped it will continue.

With regard to China, Pichette defended the company's decision to move its search operations from mainland China to Hong Kong.

"This was a tough situation and we really believe we made the right decision," he said, adding that the company still has engineers and marketing personnel in mainland China.