Google Q1 - Smashing expectations

Google reported results last week that blew past expectations, along with a 5% dividend increase and $70 billion in stock buybacks. Earnings per share were $2.81, much more than analyst estimates of $2.02.

Ads sold on Google's search platform rose 8.5% to a gargantuan $66.9 billion for the quarter. Have you tried 'AI Mode' in a normal Google search? It's really impressive!

Revenue from the important Google Cloud hosting business rose by 28%. YouTube had another stellar year, rising to 125 million subscribers and raking in lots of cash.

Google does have some problems. US regulators are attacking them in court, threatening to force them to sell the Chrome browser business. A deal with Apple to make Google the default search may be banned. And a recent court ruling labelled its ad business a monopoly.

Google probably has too many employees. I read that there are 184 000 people on their payroll and only about 500 work on the core search business (described above, and 75% of group revenue). What do the rest of them do? Work from home? Come into the office for the free food and massages, and then email each other all day?

CEO Sundar Pichai should cut some overhead, starting with the staff complement. That would transform their profit margins, and maybe improve the share rating. Google trades on a price-to-earnings ratio of 17.8, which is too low. Meta is on 22.8 times and Microsoft is on 31.2 times.