Monday, March 06, 2006

Blog of the Week: Internet Outsider

Google: Reading The Q1 Tea Leaves

Crystal_ball_1 All right, bearing in mind that even Google executives seem to have very different views about where the business is going, let's think through what the events of the last few days might mean.

On Tuesday, in answer to a question about whether growth might have been turbocharged last year by anything of a one-time nature, CFO George Reyes told a compelling story about why growth accelerated then and why it is slowing now. The stock instantly got crushed. Eight hours later, Google put out a press release that ignored Reyes' story, and, therefore, essentially denied it. The stock recovered a bit. Two days later, a parade of Google executives, including Reyes, gave glowing presentations about how the future contained nothing but upside, upside, upside (and no mention of the "law of large numbers," either). The stock recovered a lot.

So...What happened in the eight hours between when George tanked the stock and Google issued its tacit-denial press release? Most likely, Eric, Larry, Sergey, George, Google's General Counsel, Google's external law firms, and Google PR team held a series of meetings/phone calls to deal with the crisis. In these meetings, they probably reviewed exactly what George said, and compared this to the actual, real-time performance of the business. Then...



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