Oct 27, 2007

To run with the dogs, you have to rise with the roosters - "Don Thompson"

The mid-level managers summit was a life changing experience for me in many ways. The Key note address was delivered by Don Thompson, President of McDonald’s USA. It's encouraging to note how well he's done - in a relatively short period. The fact that he's risen to his position whilst maintaining his Principles & Values, is that much more impressive.
Don - started out by exhorting the audience to be open to new opportunities. Most of us know that as we navigate the enigma that is "Corporate America" there will be days of Aspiration, Inspiration, Consternation, Indignation and ultimately - Celebration. Below are some of Don's Professional Tit-Bits - which I personally found very useful.

-> Our days on each are too limited for us to go about feeling miserable
-> Romans 12: "I urge you - in view of God’s mercy to offer your bodies as living sacrifices - holy & pleasing to God".
-> Academic credentials will take you so far, diligence & determination will take you to a different level
-> Know your business as deeply as you can
-> Be open to diagonal and/or horizontal change
-> Look to get broad exposure, International Experiences help improve one’s overall knowledge
-> Learn more about the people you want to emulate and the positions they hold
-> To be successful, you need to be able to manage your manager. Understand his top priorities and strive to help him or her, achieve them
-> "Read the tea leaves". Often, signs come long before the Storm.
-> Develop Emotional Intelligence and Nurture & Coach with honesty
-> Keep friends around you who will stab you in the front - friends who will deliver "real-talk" at all times
-> Believe in yourself and know what you're good at. It's equally important to know what you're NOT good at and get help in those areas. Put your ego aside and surround yourself with talented and capable people
-> Be Self-Confident enough to not "sell out". Always be true to yourself and maintain your principles
-> Be adaptable, don't get caught up in Office Politics
-> Find out what you want to do and drive hard to get it done. Network when you can and stay focused on your key goals
-> If you really thing it through, you have more options than you think. Write out some key issues or problems and outline your key solutions. Never dwell on your issues

Don was relaxed, engaged and managed to convey a very positive message to the audience. I was particularly struck by his priorities - God, Self, Family and Career, in that order. I certainly share Don's focus on God and his feeling that one should never impose our beliefs on others. I did get a chance to meet him briefly later on in the day, and I told him how much of an inspiration he's been - to me. I also told him that I'll be watching closely - and I fully expect him to become CEO, sometime soon.

Good Keynote - Great man............

Oct 25, 2007

Google's Thing Is All World

With each passing quarter, Google is raking in more revenue from Searchers outside the United States. During the summer, Google's international sources accounted for $2.03 billion, or about 48 percent of its revenue. Some Analysts have speculated that Google will eventually derive the bulk of its revenue from outside the United States. The signs are not great for other Search Engines – at least, not right now. Comscore estimates that Internet users are conducting approximately 1.4M Searches every minute – most of them through Google. In certain key markets though – other Search Engines have leveraged the first mover advantage well, and built up a healthy following amongst Internet Users.

I referenced Baidu in an earlier post – as a great example of a home-grown Search Engine which continues to grow in popularity amongst China’s Internet Users. Earlier today, Baidu reported strong growth, in its third-quarter profits, driven by growing query volume and increased engagement from active searchers, all this despite Google's efforts to expand in China. Profits were 181.7 million yuan and Revenue jumped to 496.5 million yuan ($66.3 million) from 237.6 million yuan.
Baidu currently has 60.5 percent of China's search engine market in the third quarter, up from 57.6 percent the previous quarter, according to Beijing-based research firm Analysys International. Google was in second place with 23.7 percent, up from 21 percent the previous quarter, according to Analysys. Yahoo Inc.'s China arm was in third place with 10.4 percent.
Baidu said its number of active online marketing customers grew nearly 12 percent sequentially to about 143,000. Costs related to Baidu's Japanese operations reduced earnings by 8 cents per share in the latest quarter, the company said.

In Japan, Yahoo has maintained its popularity amongst the highly engaged Japanese Internet Users – although Google is growing in popularity. Yahoo's Query Share in Japan is over 55% while Google's is over 30% and growing. In S/Korea – home grown Search Engines such as Naver and Daum have levered Korean’s preference for human interaction over software in getting search results. The whole concept of Universal or Blended Search was pioneered on a large scale, by Naver. According to comScore's qSearch 2.0 service, more than 37 billion searches worldwide went through Google in August. That's about 60 percent of all searches, Yahoo Inc. was second worldwide with 8.5 billion, followed by Baidu at 3.3 billion, Microsoft Corp. at 2.2 billion and Naver at 2 billion.
I’m still not fully sold on the relevance and accuracy of panel based metrics – such as those delivered by Comscore and Nielsen Net Ratings. However, they do provide the only available means to monitor the Global impact of General Interest Portals & Search Engines – in key markets around the world. The sobering fact is that Google continues to grow Market Share across Europe, the Americas and most markets in Asia. It will take some significant form of innovative disruption to slow this trend in the months and years ahead.

Mid - Level Managers Symposium

Earlier today, I attended the Mid Level Managers Symposium - organized by the ELC. This was my first time at this event and my first time in DC. Truth be told - this has been a week of many firsts. The theme for this event was - Breaking through - Using Adaptive Leadership In our ever changing Corporate Environment. The keynote was delivered by Don Thompson, President of MacDonald's USA. I've decided to dedicate a separate post to put down my thoughts about his speech.

Following his keynote, we broke out into the first of two half-day workshops. Each Workshop centered around the overall theme for the event - Adaptive Leadership. We heard brief speeches from panelists and hosts followed by round table discussions - driven by facilitators at each table. I came away impressed with the depth of knowledge which ELC members have and their devotion to sharing their knowledge with others. This is a great Symposium for any minorities who aspire to take on leadership positions in the Global Corporate World. Below are my key takeaways regarding Adaptive Leadership.

Adaptive Leadership is a mindset. It's a set of strategic practices which an individual consciously implements in order to develop the adaptability to thrive in complex, competitive and challenging environments. It's about strengthening one's own self awareness and tuning your antenna to the behaviors and actions of others. Leadership can be learned, It is not an inherent set of traits such as charisma or charm.
Adaptive leadership teaches individuals how to enhance the effectiveness of their interactions by adapting their approach to people, based on what they want to discuss and how they think people will respond. By better meeting the needs of each individual, leaders create higher levels of engagement and organizational results. In the case of Corporations, much depends on having widespread leadership that can come from anywhere within an organization, not just from those in top positions of authority. Because adaptive change generates resistance, exercising leadership can be both difficult and dangerous.

An Adaptive Leader expects change - even welcomes it. It's important to find ways to make your daily grind as uncomplicated as possible - whether that means breaking down issues and deliverables into pint sized tasks or effectively delegating down to subordinates and managing up to your boss. I re-learnt importance of making meaningful connections and building good and sustainable relationships. These are key focus areas for any adaptive leader. I also leanrt that it's important to leave all your relationships well.

Any visible minority, trying to navigate through the challenges and identify the opportunities which the Corporate world provides, must first learn to adapt to a new environment - whilst remaining true to specific principles and values. That's the key to staying grounded. In the weeks and months ahead, I'll develop these theme further and share more of my insights from the ELC Conference.........

Disecting Google's 3rd Quarter '07 Results

Okay - so I decided to whip whip on my mask and gloves and perform my own brand of Surgery on Google's '07 results. Frankly I'm amazed at how fast this company has grown in terms of revenue, profit and especially manpower - in 5 years. On a worldwide basis, Google employed 15,916 full-time employees as of September 30, 2007, up from 13,786 full time employees as of June 30, 2007. Third Quarter results were impressive - any which way you look.

Eric Schmidt, CEO of Google. "Our core search advertising business experienced continued momentum driven by growth in monetization and traffic, and we are creating a wider and deeper ads system through our focus on innovation, bringing more ad formats to our advertisers. Our efforts to offer more products and services in international markets as well as effectively grow our technology infrastructure and add to our deep talent base during the quarter helped to deliver growth by enabling Google to reach more users around the world." I'd say that's a mild understatement - let's get into the numbers.

Q3 Financial Summary Google reported Gross Revenues of $4.23 billion for the quarter ended September 30, 2007, an increase of 57% compared to the third quarter of 2006 and an increase of 9% compared to the second quarter of 2007 (including TAC). In the third quarter of 2007, TAC totaled $1.22 billion, or 29% of advertising revenues Google reports operating income, net income, and earnings per share (EPS) on a GAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAP measures in the accompanying financial tables.

Operating Income: GAAP operating income for the third quarter of 2007 was $1.32 billion, or 31% of revenues. This compares to GAAP operating income of $1.10 billion, or 29% of revenues, in the second quarter of 2007 Non-GAAP operating income in the third quarter of 2007 was $1.52 billion, or 36% of revenues. This compares to non-GAAP operating income of $1.35 billion, or 35% of revenues, in the second quarter of 2007

Net Income
GAAP net income for the third quarter of 2007 was $1.07 billion as compared to $925 million in the second quarter of 2007. Non-GAAP net income in the third quarter of 2007 was $1.24 billion, compared to $1.12 billion in the second quarter of 2007
GAAP EPS for the third quarter of 2007 was $3.38 on 317 million diluted shares outstanding, compared to $2.93 for the second quarter of 2007 on 315 million diluted shares outstanding. Non-GAAP EPS in the third quarter of 2007 was $3.91, compared to $3.56 in the second quarter of 2007.

Revenues Google reported revenues of $4.23 billion for the quarter ended September 30, 2007, representing a 57% increase over third quarter 2006 revenues of $2.69 billion and a 9% increase over second quarter 2007 revenues of $3.87 billion.
Google Sites Revenues Google-owned sites generated revenues of $2.73 billion, or 65% of total revenues, in the third quarter of 2007. This represents a 68% increase over third quarter 2006 revenues of $1.63 billion and a 10% increase over second quarter 2007 revenues of $2.49 billion.
Google Network Revenues: Google's partner sites generated revenues, through AdSense programs, of $1.45 billion, or 34% of total revenues, in the third quarter of 2007. This represents a 40% increase over network revenues of $1.04 billion generated in the third quarter of 2006 and an 8% increase over second quarter 2007 revenues of $1.35 billion.

International Revenues - from outside of the United States totaled $2.03 billion, representing 48% of total revenues in the third quarter of 2007, compared to 44% in the third quarter of 2006 and 48% in the second quarter of 2007. Had foreign exchange rates remained constant from the second quarter of 2007 through the third quarter of 2007, our revenues in the third quarter of 2007 would have been $24 million lower. Had foreign exchange rates remained constant from the third quarter of 2006 through the third quarter of 2007, our revenues in the third quarter of 2007 would have been $121 million lower. Revenues from the United Kingdom totaled $661 million, representing 16% of revenue in the third quarter of 2007, compared to 16% in the third quarter of 2006 and 15% in the second quarter of 2007.

Paid Clicks - Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 45% over the third quarter of 2006 and approximately 5% over the second quarter of 2007.

TAC - Traffic Acquisition Costs, the portion of revenues shared with Google's partners, increased to $1.22 billion in the third quarter of 2007. This compares to TAC of $1.15 billion in the second quarter of 2007. TAC as a percentage of advertising revenues was 29% in the third quarter, compared to 30% in the second quarter of 2007.

The majority of TAC expense is related to amounts ultimately paid to our AdSense partners, which totaled $1.12 billion in the third quarter of 2007. TAC is also related to amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $105 million in the third quarter of 2007.

Other Cost of Revenues - Other cost of revenues, which is comprised primarily of data center operational expenses, credit card processing charges as well as content acquisition costs, increased to $441 million, or 10% of revenues, in the third quarter of 2007, compared to $412 million, or 11% of revenues, in the second quarter of 2007.

Operating Expenses - Operating expenses, other than cost of revenues, were $1.25 billion in the third quarter of 2007, or 30% of revenues, compared to $1.21 billion in the second quarter of 2007, or 31% of revenues. The operating expenses in the third quarter of 2007 included $659 million in payroll-related and facilities expenses, compared to $625 million in the second quarter of 2007.

So there you have it - very strong earnings all round. The only problem with a report like this one is that now the street will expect this type of performance - on the regular. I"m not so sure that's sustainable - but time will tell.....

Google Roars Back........

Google Inc.'s third-quarter profit soared 46 percent to hurdle the enormous expectations that have elevated the Internet search leader's stock price by more $100 during the past month.
The Mountain View-based company said Thursday that it earned $1.07 billion, or $3.38 per share, for the three months ended in September, up from net income of $733.4 million, or $2.36 per share, at the same time last year. If not for the cost of awarding stock to its steadily expanding work force, Google said it would have earned $3.91 per share. That topped the average estimate of $3.78 per share among analysts surveyed by Thomson Financial. Revenue for the period totaled $4.23 billion, a 57 percent increase from $2.67 billion last year.

Google, which is growing revenue and profit four to five times faster than rivals Microsoft and Yahoo Inc is expected by Wall Street analysts to generate revenue of $16.6 billion this year, virtually all through online advertising. Apparently, every one of its top 100 advertising accounts was increasing spending with Google and there’s potential for further growth, based on customer’s current spend levels. The Company is trying to convince it’s large customers that Search Advertising can be synonymous with building a corporate brand. together."

After subtracting commissions paid to its thousands of advertising partners, Google's revenue stood at $3.01 billion — about $70 million above the average analyst estimate. The performance represented a return to form for Google after its second-quarter earnings disappointed Wall Street. The company has surpassed analyst estimates in all but two of the 13 quarters since its August 2004 initial public offering. Investors already had been counting on a stellar quarter from Google and their assumptions contributed to a 19 percent increase in Google's stock price during the past month as the shares smashed through $600 for the first time - closing at $668.51 last night.

Google's earnings statement is looking pretty good, in fact it's share price has increased more than sevenfold from the IPO price to create an about $175 billion in additional shareholder wealth. The company is thriving because more advertisers are shifting spending to the Internet, where Google has built the most effective system to connect with prospective customers. There's ample opportunity to display the ads because Google currently fields about 1.2 billion search requests worldwide per day, based on the latest data from Comscore Inc. That's more than quadruple the number of requests handled by its next closest competitor, Yahoo Inc. Nearly two-thirds, or $2.73 billion, of Google's revenue came from searches and other activity on its own Web sites.

And according to data from Comscore released last week, Google's market share lead over Yahoo and other search firms grew in September. Google finished September with market share of 57 percent, according to Comscore, up from 56.5 percent in August. Yahoo's market share also grew, but by a smaller amount, from 23.3 percent in August to 23.7 percent in September. Live Search came in third at 10.3%, ASK.com had 4.7% share and AOL rounded out the group with 4.3% share. It's worthy of note that Live Search, ASK and AOL - all lost share in the quarter.

Blogging From The ELC Summit

I arrived at the ELC summit late on Wednesday October 24th. For those who have never heard of the Executive Leadership Council, it is the foremost Leadership Development Forum for African Americans Leaders, today. I was privileged to be invited to attend their Annual Recognition Dinner on Wednesday night and then participate in the Mid-level Managers forum the next day.

The dinner was a very special event - I've never seen so many black executives in the same place. The ELC Video - produced by lead sponsor - Target, was also pretty cool. For me though, the highlight of the night was a great Live Performance by Jennifer Hudson

The key learning for me was that, though Corporate America has come a long way, in terms of understanding the value of really fostering a truly diverse workforce - there's much work yet to do.

It's great to see Companies such as Target, PepsiCo, Coca-cola, Pfizer and ING, supporting ELC events and actually fostering diversity across their organizations. Truth is that these companies can't afford NOT to do so. They understand the importance of ensuring that their work-force is reflective of the consumer base which they serve.

That said - there are other great companies - like IBM and GE which actively recruit, train and elevate visible minorities to their Management ranks. Corporate America needs to actively strive to promote a diverse workforce - made up of talented men and women from all works of life. We all have something to offer - and the fact that I don't look like you, or have the same background as you do, doesn't mean that I can't be a great asset to your Company.

Organizations such as the ELC provide a good avenue for Blacks to learn about what it takes to succeed in Corporate America, how to navigate the landscape in our ever changing world. I applaud their efforts and look forward to attending this event - next year.

Oct 1, 2007

Hey IWON - Can I Win - just once?

I heard that the folks at IAC were keen to give away more prizes, and never being one to miss out on free stuff, I went straig to the iwon site to check things out for myself.

After spinning the wheel 5 times - I came up with "Sorry" 4 times and Try Again once. A little discouraging, but I battled on all the same.

Whose' the fastest Crawler? I asked a question about the fastest Search Engine out there in terms of crawl speed. i also wanted to get Rand's opinion on the impact of Index size on c, rawl speed in general.

His Response:

Historically, although MSN was pretty quick to initiaitve the crawls on major sites regularly. They (MSN) - did a bad job of crawling big sites properly. Yahoo and google are both relatively fast and have good abillity to categorize and organize docs from large sites efficiently, within their index.

Index Size as a relational factor to drive crawl speed???

Index size helps with relevancey = and it also helps with link structure and helps with rankign the right suff i the right order. If a Search engine can't efficiently crawl large sites and classify their content, the Engine is unliely to effectively rank the documents - this has a direct impact on Relevance.