Google Fiber 'not a hobby,' exec says during earnings call

Company using Kansas City launch to 'debug' product offering
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Google (Nasdaq: GOOG) Fiber, the mega-broadband offering that has created the nickname "Silicon Prairie" for Kansas City (Missouri and Kansas), is no "hobby," Patrick Pichette, the company's senior vice president and CFO, said during a fourth quarter earnings call yesterday afternoon.

"We really think that we should be making good business with this opportunity and we're going to continue to look at the possibility of expanding," Pichette said during the question and answer portion of the call with analysts. "But… because we are in the early days, we just got to nail Kansas City. It's a perfect place for us to kind of debug all of the elements of the product and the experience for the users."

Pichette's comments came during a call where Google execs touted fourth quarter revenues of $14.42 billion, up 36 percent over the same quarter in 2011 and up 8 percent quarter-over-quarter.

The company also "hit $50 billion in [annual] revenue for the first time last year," added CEO Larry Page, noting this was "not a bad achievement in just a decade-and-a-half."

In addition to detailing the financial results--which caused the company's stock to climb 4.9 percent to $737.50, according to a Forbes report--executives used the call to outline Google's accomplishments and direction. Key among these is the ongoing success of the video business.

"Videos are now baked into the core of all of our products, whether it's search, display, mobile and, of course, YouTube itself," Nikesh Arora, senior vice president and chief business officer, said. "YouTube is well positioned for the changing viewing habits of today's multiscreen world."

Another part of the YouTube success--and a key element for Google--is advertising, as "our top 100 global advertisers spent over 50 percent more in 2012 than they did in 2011," Arora continued.

Although it might seem counterintuitive, Arora said a big part of the YouTube experience, the TrueView skippable ad format, also worked with advertisers.

"Agencies and marketers are seeing real benefits," he said. "You only pay for the ad if viewers watch them. In fact, 70 percent of our in-stream ads are now TrueView formats and this quarter TrueView came to Xbox, the iPad and the Wii."

The executives also touched on Motorola Mobility, an acquisition still wending its way into the company's inner workings with more change to come as Google sheds the Motorola Home business unit.

"We are not in the business of losing money with Motorola or even cross-subsidizing it. But we are really 180 days into this journey and we've made a ton of progress, including the sale of the Home business," said Pichette.

Google spent about $12.5 billion to buy Motorola Mobility and last month announced it would sell Motorola Home to Arris (Nasdaq: ARRS) for $2.35 billion.

"It's still early days, but I am excited about the innovative way they're approaching product development and the speed of their execution," Page added.

For more:
- Morningstar provided this transcript of the earnings call
- Google issued this press release
- Forbes ran this story

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