Google shares rose more than 3 percent on Friday, a day after the giant Internet company reported strong sales growth in the second quarter.
Mountain View-based Google is spending heavily to develop new tech products, hire new employees (they’re up to 52,000 now), build new data centers and buy up commercial real estate. And in recent quarters, some analysts have fretted over a gradual increase in the company’s operating expenses and capital investments. (That’s in addition to those who worry about a decline in the average price advertisers are willing to pay for Google ads.)
But even if profits aren’t growing as fast as revenue, the overall uptick in Google’s business seems to reassure many investors, according to Youssef Squali, an analyst at Cantor Fitzgerald. Google’s management, he wrote in a research note, is “likely to get a pass as long as revenue growth remains robust.”
Other analysts noted Google’s success in winning consumers to its YouTube video service and Android software, along with new initiatives like driverless cars, broadband fiber service and software for wearable devices, automobiles and TVs.
It may take a while for those initiatives to pay off, but Colin Sebastian of Baird Equity Research told his clients, “In our view, Google is one of the few truly innovative technology companies that can justify a long-term investment perspective.”
Investors also seemed unconcerned about the news that Google’s Chief Business Officer, Nikesh Arora, is leaving to run a subsidiary of Japan’s SoftBank. He’ll be replaced, at least temporarily, by Omid Kordestani, who was widely respected as the former Google sales executive who led the company’s ad business in its early years.
It’s the latest of several executive changes at Google, as Reuters’ Alexei Oreskovic noted in an article Friday. The former head of YouTube, Salar Kamangar, moved to another role earlier this year. Longtime Android chief Andy Rubin is now leading a secret project that involves robots. And senior vice president Vic Gundotra, who led the company’s effort to build its Google+ social network, also left this spring.
Meanwhile, CEO Larry Page has elevated two other executives – marketing chief Lorraine Twohill and broadband head Craig Barratt – to senior rank.
But there’s no clear pattern to the changes: In some cases, executives may have decided on their own to pursue new challenges, although in others it appears Page wanted new leadership. Analyst Colin Gillis of BGC Partners told Reuters that Page may want fresh eyes overseeing key growth sectors.
“The opportunities they’re chasing are so much bigger now,” Gillis told Reuters, referring to the changes since cofounder Page moved back into the CEO’s office three years ago.
Mountain View-based Google is spending heavily to develop new tech products, hire new employees (they’re up to 52,000 now), build new data centers and buy up commercial real estate. And in recent quarters, some analysts have fretted over a gradual increase in the company’s operating expenses and capital investments. (That’s in addition to those who worry about a decline in the average price advertisers are willing to pay for Google ads.)
But even if profits aren’t growing as fast as revenue, the overall uptick in Google’s business seems to reassure many investors, according to Youssef Squali, an analyst at Cantor Fitzgerald. Google’s management, he wrote in a research note, is “likely to get a pass as long as revenue growth remains robust.”
Other analysts noted Google’s success in winning consumers to its YouTube video service and Android software, along with new initiatives like driverless cars, broadband fiber service and software for wearable devices, automobiles and TVs.
It may take a while for those initiatives to pay off, but Colin Sebastian of Baird Equity Research told his clients, “In our view, Google is one of the few truly innovative technology companies that can justify a long-term investment perspective.”
Investors also seemed unconcerned about the news that Google’s Chief Business Officer, Nikesh Arora, is leaving to run a subsidiary of Japan’s SoftBank. He’ll be replaced, at least temporarily, by Omid Kordestani, who was widely respected as the former Google sales executive who led the company’s ad business in its early years.
It’s the latest of several executive changes at Google, as Reuters’ Alexei Oreskovic noted in an article Friday. The former head of YouTube, Salar Kamangar, moved to another role earlier this year. Longtime Android chief Andy Rubin is now leading a secret project that involves robots. And senior vice president Vic Gundotra, who led the company’s effort to build its Google+ social network, also left this spring.
Meanwhile, CEO Larry Page has elevated two other executives – marketing chief Lorraine Twohill and broadband head Craig Barratt – to senior rank.
But there’s no clear pattern to the changes: In some cases, executives may have decided on their own to pursue new challenges, although in others it appears Page wanted new leadership. Analyst Colin Gillis of BGC Partners told Reuters that Page may want fresh eyes overseeing key growth sectors.
“The opportunities they’re chasing are so much bigger now,” Gillis told Reuters, referring to the changes since cofounder Page moved back into the CEO’s office three years ago.
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