Google Inc. is moving forward with its plan to become a Wall Street darling after many years of acting as it deems fit without much thought for what Wall Street thinks. Earlier in August, Fortune noted that “Google, which has a long history of snubbing Wall Street, is finally planning on being more agreeable to its investors and their desires.” The Wall Street Journal reports that Google is now opening up to Wall Street as it starts to hold business briefings with analysts.
News had it that Google has started holding 15- to 30-minute briefings with analysts where talks centered on Google’s business. The briefings with analysts are being dubbed “Office Hours” and the first round of briefings gives an insight into Google’s expenses, hiring trends, and headwinds for the third quarter. Mark Mahaney, an analyst at RBC Capital Markets was quoted saying, “Google has made more effort with investors in just the last couple of months than they have in years.”
A more transparent Google
In August, Google decided to form a new parent firm named Alphabet in an effort to maintain a leaner, structure. The firm says it “will rigorously handle capital allocation and work to make sure each business is executing well… with this new structure we plan to implement segment reporting for our Q4 results, where Google financials will be provided separately than those for the rest of Alphabet businesses as a whole.”
More so, Google has noted that it would reduce its habit of burning money on moonshot projects. All the moves being made by the firm goes on to show the changes that its new CFO Ruth Porat, is making towards making the firm more agreeable to Wall Street. You’ll remember that Ms. Porat was in charge of slashing expenses as the CFO of Morgan Stanley before joining Google.
After forming Alphabet, the firm has spun off its Niantic Labs arm and it created a separate auto firm for its car project. The firm also reduced the rate at which it was hiring new workers. In the first quarter, the firm employed 1,819 workers, which is the lowest since Q1 2013 – the firm adds an average of 2,435 workers every quarter.
Wall Street should smile on Google
Google is changing from a rouge firm to a business-like firm and Wall Street will surely be appeased. The firm doesn’t provide revenue or earnings forecasts but Wall Street now has a better insight into the state of things at the firm. Google is set to release its Q3 2015 results on October 14, and it would be nice to see how Wall Street reacts after the firm misses, hits, or beats estimates.