Is Google at its apex? That has been the relevant investment question about the search engine giant for several years now, and it came up again at a company presentation to the Goldman Sachs internet conference in Las Vegas yesterday.
Of course, Google says no, it has plenty of room for growth. Potent as Google's search ads have been, said Nick Fox, director of business product management, most queries still are not served with any ads. Under development are algorithms that get past key words and identify other queries relevant to a given advertiser.
Fox offered a slightly different example of untapped potential -- Harry Potter. As a search term, he said, it gets a surprisingly low click rate because a diverse audience placing that query needs to be further broken down into "a better sense of what they are looking for," to realize full value for advertisers.
In a general way, Fox added, "we are the best out there, but there is room to improve. The quality (of relevant ads served) is lacking compared to the quality of the search results."
Wall Street has vacillated lately in its view of whether Google's phenomenal growth can be sustained or whether it is entering a period of strong but slower growth. Its shares traded as high as $750 last year, fell to $450 this spring but have bounced back to about $550.
The company's first quarter results stand in bold relief against those of struggling newspaper companies we highlighted in a post earlier this week. Google recorded 42% revenue growth year to year and maintains a 30% operating margin. Its operating earnings of $1.55 billion were nearly five times those of Gannett.
