Live-Blogging Google Earnings

Andrew LaVallee

Google posted a 19% gain in second-quarter profit, while revenue rose 3% to $5.52 billion.

Bloomberg News

Refresh this page for updates from its conference call with analysts, which starts at 4:30 p.m. EST.

4:32 p.m. EST: On the call are Eric Schmidt, CEO; Patrick Pichette, CFO; Jonathan Rosenberg, SVP of product management; and for the first time, Nikesh Arora, president of global sales operations and business development.

4:35: “Google’s business appears to have stabilized, despite the still weak economic environment,” Schmidt says.

4:36: History shows that companies that invest in innovation come out of downturns stronger, he says. “You don’t change the world incrementally,” he adds. “You do it through big innovation.”

4:37: For example, operating systems! “We need faster operating systems for the same reason we need faster browsers.”

4:38: Display advertising, “particularly including YouTube,” performed well this quarter, and the video-sharing site is “now on a trajectory that we’re very pleased with,” Schmidt says.

4:39: “Mobile devices are becoming an extension of the Internet,” he says. Eighteen to 20 Android-powered phones will be on the market by the end of the year.

4:40: Pichette takes over. Gross revenue grew 3% yoy to $5.5 billion. Shopping and electronics consumer verticals were strong, while finance continue to be weak. AdSense grew 2%.

4:43: Google was down about 375 employees, ending the quarter with about 20,000 full-timers. Pichette notes that Google continued to hire in many areas of its business, and that the reduction is primarily due to previously announced cuts in sales and marketing.

4:46: Rosenberg takes over to highlight key product launches. “We’ve become a lot more focused on what we call the active power users,” he says.

4:47: These power users are increasingly sophisticated in how they use search — longer queries, higher expectations, more frustration when they don’t find what they’re looking for — which led Google to develop the “search options” feature.

4:48: Speed also key for all Google products. Picasa’s Web slideshows are faster now, for example. “You can see this if you go to a large online album and you just rapidly bang on the right arrow key…just go bang! Bang! Bang! Bang! On the right arrow and watch on the screen.”

4:48: He adds: “It’s cathartic.”

4:49: Gmail team pushing out one new update, such as automatic message translation, a week. Mentions that Gmail (finally) lost the “beta” label last week.

4:50: YouTube monetized views have more than tripled in the past year. YouTube “actively promoting” featured partner videos on various sections of the site.

4:53: Imran Khan from J.P. Morgan has the first question. On mobile search, what’s the revenue difference, and will it cannibalize desktop search? And any concerns about competitors’ new search technology (not naming names) and how they’ll affect deals with partners like AOL and Ask?

4:54: Rosenberg says “I don’t think there really is a cannibalization dynamic,” adds that mobile searches tend to complement desktop volume. “Mobile goes up when people are away from their desks, so weekend tends to be higher for mobile traffic.” Reverse is true for desktop.

4:55: Mark Mahaney asks how Schmidt sees the business stabilizing.