Corporate Eye

Google Invites Investors Home


When Google speaks, people listen. Whether it is the enormous market capitalization, the global reach of the company’s well-known brand, or simply the expectation that the company will continue to be a worldwide innovator, when Google does something new, it matters to more than just Internet searchers.

Recently, Google released its first-quarter earnings in a manner that broke the traditional mold for releasing financial information. Instead of posting the actual press release and financial numbers via one of the financial newswires, Google released only a short statement saying that its earnings statement had been posted on the company’s investor relations website. A link to the IR website at was provided. However, no actual numbers or commentary was included in either the release text or its headline.

The full text of the statement released on Marketwire was just 50 words.

MOUNTAIN VIEW, CA–(Marketwire – April 15, 2010) –   Google Inc. (NASDAQ: GOOG) has released its first quarter 2010 financial results. Please visit Google’s investor relations website at to view the earnings release. Google intends to make future announcements regarding its financial performance exclusively through its investor relations website.

Releasing Financial Information on Company Website

This is not the first time Google has published its earning press release and materials on its investor relations website. In fact, Google and most other corporations routinely post such information on the IR websites in order to make it easily accessible to investors and potential investors. It also reduces the workload of the IR Department by freeing them up from responding to routine investor requests for publicly available information.

However, until this quarter, Google had always followed the time honored tradition of releasing earnings information via financial newswire. Like most other corporations, Google orchestrated a carefully timed dance in which a press release with the earnings data was submitted to one of the financial newswires. Then, they waited for the release and its contents to begin showing up in additional news streams to verify that the release had been done correctly. Only then, did the company release the earnings data online, thereby ensuring that the information had been publicly released in an unquestionable manner first.

With its first-quarter earnings, Google took a different track by simply releasing a notification that the information had already been released (or likely simultaneously released) on the company’s own website.

Google is not the first publicly traded company to release its earnings information on its corporate website, however, it is the first worldwide household name to do so. Ironically, the updated guidance giving companies like Google the green light to do just that came almost a year and a half ago. So, why did it take so long for companies to start using their websites to release financial information, and will other companies follow in Google’s footsteps.

Slow Moving Regulation Meets Internet Speed

In 2008, the U.S. Securities and Exchange Commission updated its Internet guidance for publicly traded companies using websites and electronic media for the first time since 2000. The update brought the agency’s Internet guidance up from archaic to merely out of date. However, in doing so, it opened the door for exactly the sort of thing that Google did with its first-quarter earnings for 2010.

The SEC Interpretive Release addressed several issues, and just as tellingly, specifically did not address even more issues. However, the interpretation did bring acceptance to the concept that a publicly traded corporation’s website could be used in certain circumstances to release information and communicate with stockholders. As long as the company’s website was a “recognized channel” for distributing information, then publishing material on that website would count as publicly releasing the information.

The criteria for considering a company website to be a recognized channel included that investors know the website’s location and that the information be easy to find. Most importantly, the guidance required that the company inform investors that it publishes important information on the website and that it plans to do so in the future. Google has already been stating in its financial filings that it has a website, where it is, and that it does publish financial information there.

Despite this go ahead from the SEC, the vast majority of companies continued to operate under the old financial news release first, website second model. The question was whether companies were just that slow moving, or whether there was some fear about changing a paradigm that was already working.

Penguins must leave the safety of the ice in order to find food in the oceans. However, there is no way of knowing whether a killer whale or other predator is lurking in the waters below. The only way to find out is to jump in and see what happens. Of course, no one wants to be the first on into the water, so the penguins inch closer and closer to the edge until finally, one of them drops into the water below. If nothing happens, then the rest of the penguins jump quickly into the waters to feed. If, on the other hand, a predator appears, the penguins move back to try again another time.

In the case of corporate financial earnings, many companies figured why take the chance of angering shareholders or provoking the wrath of regulators. At issue were both the inertia of a long-used methodology, as well as the pesky problem of letting investors know exactly when and where financial information would be released in the sometimes unreliable world of the Internet.

Google’s press release, it seems was designed to take care of that last problem. The company did not abandon the press release altogether, it just changed what it said. Moving forward, the company has indicated that it will continue to release financials on its own IR website. The interesting piece of the puzzle is whether or not it will issue another mini-press release telling everyone that the data is ready, or if it will skip that step altogether and rely exclusively on its own company website.

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Brian is a small business owner, consultant and freelance writer. Brian began his professional career in the computer industry as a consultant where he became keenly aware of the internal workings of companies from Fortune 100 giants to small two-man shops. While working with a mutual fund company, Brian developed a strong interest in finance and became a Certified Financial Planner. As a financial professional, Brian specialized in working with small business owners. Brian is the co-founder of ArcticLlama, LLC a premier business writing and consulting firm. He also runs a real world personal finance blog. Brian lives in Denver with his wife and daughter.