Google Stock Slips On Q3 Misses, Execs Talk Cloud Progress

Google executives spoke in broad strokes about the company's growing enterprise cloud business during the search engine giant's third-quarter earnings call with analysts Thursday.

Chief Business Officer Omid Kordestani, just reinstated in a job he previously held at the Mountain View-based company, told investors that Google for Work, the recently rebranded enterprise cloud business, "has great traction."

In addition to tremendous growth from Google Apps, Kordestani said the company now sees more than 1,800 new users signup for Google Drive for Work every week, and has a quarter-billion active Google Drive users from across the consumer, education and business markets.

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Kordestani said Google will continue "helping developers realize the promise of cloud computing by providing affordable, on-demand access to world-class technology."

As an example, he cited the recently announced program that makes $100,000 credits available to startups using the cloud platform.

CFO Patrick Pichette said in response to a question during the earnings call on the cloud business that "cloud is an area that is kind of booming."

"We know that the long-term trends are very clear for us which is the vast majority of businesses, everybody's moving their infrastructures to the cloud, and it is an area where we have fundamentally great assets to contribute to this industry both in terms of the flexibility, the cost structure and the technology and that's why we are investing heavily in there," Pichette said.

Google, he added, is seeing "great progress" in adoption of its cloud platform and emphasized the importance of investing in the underlying infrastructure.

"If you do take off and you really get the kind of customer adoption you expect, if you don't have the capacity in place, it can have a really important kind of differential in your success," Pichette said.

For that reason, Google "is keeping a pretty close eye on from a CapEx perspective and making sure we have the option value."

Neither Kordestani or Pichette shared specifics on customers, expenses or investments in the cloud business when pressed for it during Thursday's call.

The call followed release of the company's third-quarter results after market close.

Google reported revenue for the quarter up 20 percent from a year earlier to $16.52 billion, missing analyst expectations of $16.57 billion.

The company saw adjusted net income of $4.37 billion, up about 14 percent from the year-ago period but off from Wall Street estimates of $3.69 billion.

Google also reported spending up, especially operating expenses for research and development.

Investors sent the company's shares down about 2 percent in after-hours trading Thursday on the quarterly results to a recent market value of $354.77 billion.