Valleywag
Google's first-quarter revenues beat Wall Street analysts' expectations by $101 million — $3.7 billion to their average forecast of $3.59 billion. The stock is up nearly 20 percent today as a result. But that only happened with the help of a sinking dollar, Bloomberg reports. During yesterday's conference call, Google said its revenues would have been $202 million lower if foreign currency rates hadn't risen so sharply against the dollar during the first quarter. Google's actual share of foreign search queries only increased from 62 percent in December to 63 percent in February. "I don't think that kind of foreign currency benefit was expected,'' one fund manager told Bloomberg. Remind us, why do we have stock analysts to begin with? (Photo by klynslis)
Dollar's plunge helped Google trick Wall Street
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9:20 AM on Fri Apr 18 2008
By Nicholas Carlson
2,504 views
4 comments
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No. The dollar's plunge is the result of perceived inflation. If (and this is likely) we do see inflation, more money will be buying stocks; stocks are already hedged against inflation.
Google's trick works until employees demand more pay. Once that happens, the expenses get passed on to customers, and things balance out. These profits were at the expense of underpaid employees.
Their employees are underpaid? A fresh Ph.D. got a base of around $102k and 20% annul bonus in 2007. On top of that, you get free meals, which can easily cost $5k. (Note that if you buy meals yourself, you are spending your after-tax money.)
Now THIS is a good post. This is the kind of stuff I want to read.
@anon78: you haven't been around the Valley much, have you?
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