Thursday, October 18, 2007

Google's earnings

The stock was trading at 636 in the afterhours until this question was asked by Doug Anmuth of Lehman Brothers:

So can you give us some color on the timing of your hires during 3Q and also how we should think about this in relation to margins going forward? Thank you.

Eric Schmidt's reply:

Obviously can’t talk about margins going forward. What we said last quarter, as you know, is that this is an area where we needed to spend some more time and focus more on what is the appropriate rate. And the good news is we have done that. The numbers that you are seeing are essentially an overhang and they are an overhang from hiring that had been agreed to many, many months earlier. June, of course, is a major college hiring, university hiring, professor hiring kind of a cycle, so I don’t know that that will be repeated.

The important thing here is that we did in fact correct and I think going forward, you should be comfortable that we are paying a lot of attention to the headcount.

And that caused the stock to run to it's afterhour high of 650.

In a different tape, GOOG would have been down. These earnings already should of been factored into the price. But for the bears that want to put in their two cents, that's what foreign currency added to earnings for the quarter.

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