More tea leaves from Google’s analyst day presentation
It seems that a lot of the interesting content from last week’s analyst event at Google is in the speaker notes from the PowerPoint slide deck. Greg Linden and others have already pointed out the notes about Google’s storage plans (GDrive, Lighthouse on slide 19).
This afternoon there’s another blip on CNBC about accidental communications in the slides.
The previously undisclosed notes stated that Google’s core advertising business was expected to grow by nearly 60 percent to $9.5 billion in 2006 but that profit margins in its mainstay AdSense business could be squeezed this year and beyond.
I didn’t remember seeing a revenue forecast in there, so I went back and looked to see what it actually said (slide 14).
Our ads business for the moment is healthy and growing and we’re on a strong trajectory
projected to grow from $6bn this year to $9.5bn next year based purely on trends in traffic and monetization growth
But strong competitors are attempting to aggregate traffic
AdSense margins will be squeezed in 2006 and beyond
Y! and MSN will do un-economic things to grow share
The ad network will be commoditized over time
So, we need to build a more complete ads system that is characterized by two words: wider and deeper. That is, cast the net wider to attract new customer types) and deeper to enhance our relationship with existing customers.
Reuters says these particular notes were supposedly left in accidentally from internal planning discussions in late 2005.
“These notes were not created for financial planning purposes, and should not be regarded as financial guidance. Consistent with past practice, Google is not providing revenue guidance,” Google said in the filing.
I liked “Y! and MSN will do un-economic things to grow share”.
Don’t think we’ll be getting PowerPoint files from Google investor relations next time around. There’s a PDF file up now.
Update 03-08-2006 21:34 PDT: Paul Kedrosky has posted a copy of the original PPT slides.