Google Inc (GOOG)’s Fourth Quarter 2014 Earnings Conference Call Transcript

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Our free cash flow was $2.8 billion. And I also want to note that we completed in Q4 the sale of Motorola Mobile to Lenovo in October 29th. We recognize a gain on disposition of $740 million net of tax, which is included in our net income from discontinued operations. So, there you have it, despite a noisy quarter from a P&L perspective. We can say that we had strong results in our core business as evidenced by our 18% fixed FX growth this quarter and are well-positioned for the year ahead in the long term. Now, as Larry says, although the vast majority of our resources in time continue to be invested in our core products, we also have enthusiasm to invest in new promising ideas like self-driving cars or loon. We use the same disciplined approach to these new areas that we used for investing in our earlier bets like Android or Chrome or Display.

Our projects start with small dedicated teams that are given clear milestones to hit before they can get further investments. And you know, in cases where we achieve success against our milestones, we expand our investments and you saw this as an example earlier this week with our fiber teams. We greenlighted 18 cities in four metropolitan areas in the U.S., out of the 34 cities and 9 metros that we had reviewed in 2014, and they’re off to the races.

In other cases, when the teams aren’t able to hit hurdles, but we think there are still a lot of promise. We might ask them to take a pause and take the time to reset their strategies, as we recently did in the case of glass. And in those situations our project don’t have the impact we had hoped for, we do take the tough calls. We make the decision to cancel them and you’ve seen us do this time and time again.

So, before I turn it over to Omid, I’d like also to note that in many ways 2014 was a year of significant investment growth, both in CAPEX and OPEX at Google. From an investment perspective, we’ll continue to seek a healthy balance between growth and discipline and the willingness to throw a little back when we reached the limits of what we believe we can manageably absorb. So, with that in mind, I’ll take it over to Omid now to provide more specifics on the successful performance of our core and new businesses. Omid is joining us by phone from another location today. So I hope it over to you, Omid.

Omid Kordestani – Chief Business Officer & Special Advisor to the CEO
Thanks, Patrick. Hi, everyone, happy New Year. And thanks for joining us today. This is Omid. It’s my pleasure to join you from London tonight. I’m glad to be here to reflect on the last quarter and look ahead to 2015. 2014 ended with healthy momentum enabling us to achieve $66 billion in revenue for the year. In Q4, we launched Lollipop, our newest version of Android, refreshed our line of Nexus devices and introduced Inbox by Gmail, a new inbox that enables users to focus on the messages that matter most to them.

Meanwhile, our sales teams worked diligently with our advertising partners to deliver a strong holiday season. Today, I’ll do a quick walkthrough of the business highlights from Q4. First, I’ll give an overview of the different sectors of our ads business, performance and brand advertising and our advertising platforms. Then I’ll cover progress in our emerging non-ads businesses.

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