In this Bloomberg TV segment, L2 Founder Scott Galloway, FBR’s Daniel Ives, and Bloomberg’s Cory Johnson speak about recent earnings releases of technology giants Google, Apple, and IBM. Even though Google beat analyst estimates, revenues are not growing as fast as its new product offerings. Galloway said the number of clicks is up by 27%, but Google is deriving less revenue per each one because most are mobile. Others agreed that low CPMs for mobile ads are creating a problem for tech companies as users shift their digital habits to mobile.
As for IBM, the speakers drew attention to the financial engineering taking place in the company. Even though IBM beat analyst expectations, it had misrepresented shareholder value by reducing its tax rate from 22.2% to 20%. Johnson said IBM would have missed analyst estimates had it not made the change. Galloway added that IBM, HP, and other large tech companies with software rooted in desktop are suffering.
About Microsoft CEO’s Satya Nadella cutting 18,000 jobs, Ives said he was cleaning up the big house party that Steve Balmer had for a decade. He called the cuts a necessary evil, and said Microsoft needed to be a more efficient and focused company. Galloway called the transition of Nokia from a 60,000-person company to 12,500-person one marks the end of an era. See full video here.