[matwood]

Google missing on ad revenue is like Apple missing on iPhone revenue. It's even worse for Google because it's a larger part of their business. Is the miss a blip or a signal of a slowing ad market or are LLMs eating into their business? Hard to know, but that's the concern.

[Grazester]

LLM is not doing anything given that Bing's growth since adding chat-gpt has been negligible.

[epolanski]

You have solid numbers behind your claim?

By the way people are asking chatgpt or copilot what they used to Google. Not everything but a lot. I most certainly do and I think I'm not alone.

[Grazester]

Isn't Bing Google biggest search competition? Is the general public using chat as a general search engine to replace the more traditional search engine or is it just us tech people. I can tell you I know of no one doing this outside of tech coworkers and even then just use it for programming related tasks to a very limited way.

https://www.bloomberg.com/news/articles/2024-01-18/microsoft...

[epolanski]

Google's biggest competition is whatever makes people use their search less.

I know for sure some people who use chatgpt in place of Google search like students or people needing translations.

[cityguy33]

We beat expectations across the board a couple quarters ago except in cloud. Stock dipped the next day. I’m unconvinced this dip is a meaningful signal into the trajectory of Google or is based on any reasonable concern.

[VikingCoder]

Ad revenue: $65.5 billion vs. $65.8 billion expected ($59.04 billion in Q4 2022)

Right, they got $300 million less than expected.

Which means they only got 99.544072948% of what the analysts expected.

That means they missed analyst expectations by 0.455927052%.

Not for total Revenue. Not for EPS. Not for net income. Not for diluted EPS. For the one category, Ad Revenue.

Resulting in a 6% after-market drop.

0.455927052% miss. 6% drop.

I think it's entirely possible that people focus too much on short term metrics and not enough on long-term growth.

[matwood]

Google revenues come from ~90% ads. It's an ad company.

The company gives guidance, so the estimates are not pulled out of thin air. Google should know their ad business very well at this point.

People selling after an ad miss is medium/long term thinking. They could be wrong, but was the miss caused by a wider economic slowdown (see UPS earnings) or was it Google specific? Either way, it could be sign of Google slowing down or the economy as whole.

[jsnell]

> Google revenues come from ~90% ads.

That's not true, and hasn't been for a decade. For this earnings release, the proportion of revenue from ads was 76%.

> The company gives guidance

No, they don't. As far as I know they've literally never given guidance.

[matwood]

Ok, I divided the search revenue into the revenue number above, but it’s missing TAC. 76% is still the vast majority of revenue.

[jsnell]

TAC shouldn't be part of that computation. It's an expense, not revenue. (Yes, it's confusing that it's in the same table as the revenue numbers, but so is the headcount and you wouldn't try to work it into the equation somehow.)

Also, if you only consider the search revenue you'll err in the opposite direction. It's 55% of their revenue, so pretty soon not even a normal majority. You should look at the "Google Advertising" line.

[matwood]

Thank you!

[westhanover]

What do you think the covering analysts talk to google executives about? The weather?

[jsnell]

From your misplaced sarcasm, it seems that you might not know what "guidance" means in this context. It's the company predicting what their financials will be in the future, such as "our revenue will be in the range $X-$Y in the next quarter". There's a lot of space for discussion between those kinds of predictions and the weather. For example, they could discuss what happened in the previous quarter. They could discuss future plans, without making any exact claims on the impact of those plans.

If you truly believe Google releases guidance, how about you just find a quote for what that supposed guidance was for Q4? You won't find it, because Google does not release guidance. The GP just made it up, just like they made up the numbers.

[cityguy33]

Yet when we beat expectations in ads but barely miss in cloud the stock tanks as well. There’s no reasonable explanation I’ve heard for our stock behavior after our earnings beat expectations.

[epolanski]

Missing 0.5% of your core business revenue is a bad sign for long term.

[resolutebat]

Core business revenue went strongly up, it just went up slightly less than analysts hoped.