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Google Financial Results Offer Little Insight Into Health Of Cloud Business

Shares soared after Thursday's earnings call, but the Internet giant was silent about Google for Work.

Google supporters were elated with Thursday's quarterly financial disclosures, which exceeded Wall Street expectations primarily based on strong advertising revenue driven by Search, YouTube and Play, and coupled with the perception of a new commitment to financial discipline.

But nearly a year after the launch of the Google for Work brand -- the Mountain View, Calif., Internet giant's play to storm into the enterprise market with its cloud-based productivity tools, along with a new commitment to a channel strategy -- the much-ballyhooed earnings call was remarkably brief in its discussion of that business.

Still, with revenue up 11 percent year over year, and 3 percent sequentially, to $17.7 billion in the quarter, Google stock soared to a new high.

[Related: Microsoft COO Outlines 'Plan Of Attack' Against Amazon, Google, Apple And Others]

Class A shares crossed the $700 threshold in midday trading Friday, up more than $100 from the trading price at the time the market closed on Thursday. The spike added an extraordinary $50 billion of market capitalization.

But as Microsoft and AWS ramp up their attacks to win the hyper-scale cloud wars, and aggressively beef up their channels, Google is shedding partners with a new program that eliminates all but the most profitable. Those are the same partners that the company said formed the cornerstone of its strategy to become a serious enterprise cloud player.

CRN only noted two uses of the word "cloud" popping up twice in the entirety of the Google earnings presentation, or Q&A session that followed. There was no mention of Google for Work.

New CFO Ruth Porat, presiding over her inaugural earnings call, only referenced the enterprise cloud business once by telling investors it falls into the "adjacent areas" category of Google's various business pursuits.

The framework encourages a 70-20-10 split in resource dedication -- 70 percent going to core businesses like Search, 20 percent to the adjacent businesses -- which include Chrome and Android, as well as the cloud platform -- and 10 percent to developing "really sizable" new markets by pursuing "exciting opportunities," Porat told investors.

Omid Kordestani, Google's chief business officer, did tell investors during the call, "We’re seeing strong momentum around Google Cloud platform, with a range of great new features, new major customer announcements like HTC and JDA software and our collaboration with Broad Institute."

Other than that, well, "no results found."

PUBLISHED JULY 17, 2015

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