October is earnings season, and after today's closing bell, Google gave its Q3 earnings numbers, which cover July to September and thus will not reflect anything from the Google Pixel 3, Google Home Hub or anything else Google announced back on October 9. In its Q3 results report, Google missed revenue expectations with $33.7 billion but met earnings estimates with $13.06 per share — okay, let's ditch the hard numbers and get to the more interesting items from today's event!
- Google is still an ad-based business, and that is not changing anytime soon. Google's ad revenue in Q3 was $28.95 billion, up 20% year-over-year, and with that, Google is looking to diversify and explore new ad possibilities on almost all products and platforms. From YouTube to Google Maps to Search and beyond, Sundar Pichai says that Google is looking to find newer and better ways to offer useful methods to advertisers, such as promoted places and businesses in Google Maps. Alphabet Inc's CFO Ruth Porat also said the company feels good about the underlying strength in the ads business, especially as machine learning offers more opportunities to improve the ad experience for both users and advertisers.
"Other Bets" is making more revenue, but still operating at a loss. Other Bets includes companies like self-driving Waymo, healthcare company Verily, and Google Fiber, and it's a category that's starting to make more money, $146 million over last year's $116 million, but the operating loss for the category is up, too: $720 million up from $650 million. Google said on the call that the majority of the Other Bets revenue came from Fiber and Verily, which had some large deals with pharmaceutical companies this quarter as it leverages machine learning in a shift from reactive to proactive care.
- Waymo's still not quite ready for prime-time. When asked about when public pricing and related models would be ready for Waymo, Porat said they are still in the very early stages of commercialization and pricing models are still being tested. She also re-emphasized that Waymo is intensely focused on safety first and offering a great user experience, and as such they're taking things slowly and methodically.
- Google is ready to tackle gaming. Project Stream is an exciting experiment in streaming gaming for Google, and Pichai said that it was "one of the most important technological advancements [he's] seen in a while".
Google is still focused on expanding in China. Pichai stated that Google "deeply cares about serving Chinese users, we've been investing or many years, especially in Android... we're constantly looking for new ways by which we can serve Chinese users."
- Google is getting its act together with hardware. Google struggled to keep up with demand for earlier Pixel models, but Pichai says they believe they've straightened that out this year and are ready to help the Pixel scale the way it should have with previous models.
This has been a busy day for Google, who was revealed in a New York Times article today to have buried 'credible' sexual misconduct accusations against Andy Rubin and gave him a $90 million dollar 'exit package'. The story was not directly addressed during the earnings call today, but Pichai did write a memo that was sent out to sent to Googlers earlier this afternoon and stated the changes Google has made in the last 2 years, a and that of the 48 people terminated by Google in that time for sexual harassment, none of them were given exit packages.