Google Gaffe, Round Two
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Offer the masses unlimited storage for their data and you can get away with almost anything.
When Google inadvertently posted a presentation last Thursday with vague information about new services the search company may be developing, bloggers and the media launched into a frenzy of speculation about Google's new offerings.
But what no one but Google seemed to care about was that the notes also contained confidential financial information intended only for in-house use.
Google was forced to file an 8-K report with the Securities and Exchange Commission on Tuesday after the markets closed. Public companies use 8-K reports to notify investors of important events or corporate changes.
Google has a longstanding corporate policy against sharing its management's profit projections.
The financial data was contained in the notes attached to slide 14, which stated that Google's ad business was projected to grow to $9.5 billion this year, up from $6 billion last year.
The notes also contained a warning that investors shouldn't expect such strong growth going forward indefinitely. Google also warned in the 8-K that the information was outdated.
Google's 8-K filing states the notes were "not speaker notes prepared for the Analyst Day presentation" but were from an internal strategy presentation from the fourth quarter of 2005 that were mistakenly included in the PowerPoint presentation.
"These notes were not created for financial planning purposes, and should not be regarded as financial guidance. Consistent with past practice, Google is not providing revenue guidance," Google wrote in the filing.
There were a multitude of blog postings, message board discussions and media reports on Google's new services following the release of the PowerPoint presentation.
But no one seemed to care that Google had also released financial data until the company filed the 8-K on Tuesday evening.
"Bloggers are more interested in products and technology than financials or the numbers," said Greg Sterling, an analyst with The Kelsey Group. "They're more interested in the product strategy."
The presentation was quickly removed from Google's Web site, but some bloggers managed to post it to their blogs before it was pulled.
Google shares closed at $364.45 on Tuesday but in after-hours trading fell $7.30 by 7 p.m., to $357.15
Sterling doubted that the Google gaffe would have any long-term effect on share prices or Google's bottom line.
"I think that the company's performance is what matters in the long term. This is a PR gaffe and a momentary miscue," he said. "Google is still a young company and this is part of its 'growing pains' and maturation."