The Google Guidance Myth, Part II

Late today Google issued a press release “clarifying” CFO George Reyes’ clumsy earlier-in-the-day comments about the company’s growth and monetization prospects. Reyes’ original attempt to hold down market expectations, plus tonight’s official press release, demonstrate beyond a doubt, as I’ve said for some time, that Google, contrary to received wisdom, gives guidance. It’s just that Google is really, really bad at it.

Google Press Statement

MOUNTAIN VIEW, Calif.–(BUSINESS WIRE)–Feb. 28, 2006–George Reyes, Chief Financial Officer of Google Inc. (NASDAQ:GOOG), participated earlier today in the Merrill Lynch Internet, Advertising, Information, & Education conference. At this conference, Mr. Reyes made remarks regarding, among other things, revenue growth trends and expected sources of revenue growth.

We would like to clarify and provide further information on these statements. As we have stated before, monetization improvements will continue to be a key factor in driving future revenue growth. We still see significant opportunities to improve monetization and intend to continue to focus our efforts in this area.

Moreover, as we have stated in our SEC filings, our revenue growth rate has generally declined over time and we expect that it will continue to do so as a result of the difficulty of maintaining growth rates on a percentage basis as our revenues increase to higher levels.

Me-thinks Mr. Reyes got to spend some time at the woodshed today.


  1. I wonder what the role of CFO actually should be at a company like Google. Who decides if the CFO is doing a good job? Because certainly, Sergey and Larry have a different view on how Google should interact with Wall S
    Between the tax estimate issue and the recent remarks, Reyes certainly isn’t handling the Wall St. relationship with any aplomb – at least from a normal company perspective.
    Perhaps Reyes’ is great at the expense control side?! :)
    Would Schmidt, Brin, Page and anyone on the board actually know what to expect from a CFO? I wonder about the new board members: Mather & Otellini are the only two that would know any better. The VCs like Doerr, Moritz and Shriram have made so much money they probably don’t really care.
    Of course when it’s possible to ascribe $40B in market cap loss to a single person’s mistakes in a 3month period, you’d think people would start to care.