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AOL

AOL PR chief leaves – again

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Peter Land, head of communications at AOL, is leaving his job, marking the third public relations guru to get chopped in just over three years. The news is likely unwelcome for those covering the company as they’ll have to start relationship building all over again.

Ad Age’s Alex Kantrowitz broke the story:

AOL and Peter Land, its head of communications, are parting ways, Mr. Land confirmed on Tuesday. He declined to elaborate.

Mr. Land, who joined AOL from Pepsico in April 2013, did not have it easy in his year at the company. Over the past 12 months, AOL CEO Tim Armstrong had a number of public miscues that gained national attention, including the citing of “distressed babies” born to AOL employees as a reason for rolling back benefits and the firing of Patch creative director Abel Lenz in the middle of a conference call.

The Wall Street Journal story by Mike Shields and William Launder went into more detail about the ouster and AOL’s highly public missteps:

Mr. Land’s departure comes following a string of rough public relations episodes for Mr. Armstrong. Last August. Mr. Armstrong fired a Patch employee for taking an unwanted photograph during an internal employee conference call.

Then in February, during an AOL employee town hall event, made what has become an infamous comment about “distressed babies.” In explaining why the company was altering its 401K policy, he blamed two employees’ troubled pregnancies for costing AOL several million dollars. Mr. Armstrong eventually back tracked on that policy, but the damage had been done.

Still, the timing of Mr. Land’s ouster is strange, consider that AOL–and Mr. Armstrong– seemed to have turned the page. AOL reported fairly solid earnings back in February. Mr. Armstrong has recently announced several big advertising technology initiatives that have drawn industry praise. And next week, the company is set to host advertisers in New York for its annual NewFront event, where it will look to generate buzz around several new shows.

While media companies change their public relations strategies somewhat frequent, the move push out Mr. Land is just the latest in an ongoing pattern for AOL CEO Tim Armstrong, who seems to fall in and out of love with senior executives. For example, in late 2012 AOL said it was eliminating its chief marketing officer positions just five months after the company hired Jolie Hunt to fill that role. By this past August, the had a new CMO of AOL Advertising, Erika Nardini.

PR Week’s story by Diana Bradley highlighted that AOL chose to promote the head of investor relations to run communications:

The company has expanded the duties of IR head Eoin Ryan and AOL Advertising CMO Erika Nardini to oversee communications following Land’s departure, an AOL spokesperson said. Ryan will handle corporate communications, while Nardini will manage internal communications, corporate marketing, and foundation work.

“We are investing in our communications function by promoting two of our most talented up and coming leaders – connecting the entirety of our internal and external communications strategy under a high-powered and unified team,” the company spokesperson said in a statement.

AOL corporate communications director Doug Serton reportedly also left the company a few weeks ago, according to The Wall Street Journal.

Putting a head of IR in charge of communications could be a big mistake. Most IR heads understand talking to investors and presenting financials, while communications officers often have to deal with grayer areas. In particular, cleaning up the mess of Cook’s comments about “distressed babies” would be a challenge for anyone, but could be especially challenging for someone not used to dealing with the mainstream media and consumers.

The reporters covering AOL will have to get used to a new way of working with the company — again. Most business journalism is relationships and often the primary one on a beat is with the head of communications. Being the person whose call gets returned first can be the difference between breaking or chasing the news.

But it’s more than getting along. A new communications team means learning how best to ask questions and anticipate the spin the company will give you. You have to learn how the new communications executive will answer questions and how much detail he will give without being prodded. While learning style takes time, I’m sure the reporters covering the company have little incentive to work on getting to know the new communications head. If history proves correct, he won’t be there long.

TBN

Talking Biz News Today — April 22, 2014

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Some of Tuesday’s top business news stories:

The New York Times

The American middle class is no longer the world’s richest, by David Leonhardt and Kevin Quealy
Ackman and Valeant bid $45.6 billion for Botox maker, by Michael J. de la Merced

The Wall Street Journal

Inside Nike’s struggle to balance cost and worker safety in Bangladesh, by Shelly Banjo
Comcast profit rises 30% on video subscriber additions, by Shalini Ramachandran

The Associated Press

Job market for college grads better but still weak, by Paul Wiseman
McDonald’s profit slips amid weak sales, by Candice Choi

Reuters

GM seeks U.S. court protection against ignition lawsuits, by Supriya Kurane and Arnab Sen
Novartis and GSK trade assets as pharma industry reshapes, by Caroline Copley and Paul Sandle

Businessweek

Public funding for higher ed inches up at last. Don’t expect cheaper tuition, by Karen Weise

Today in business journalism

Bloomberg Businessweek creative director leaving for MTV
Benzinga: A new brand for financial news
Quartz hires two new staffers
Covering Bank of America and using the term fraud
Ford CEO speeds up departure

This date in business journalism history

2006: New business mag launched in Massachusetts 
2012: Union critical of Reuters

Ford

Ford CEO speeds up departure

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Ford Motor Co. CEO Alan Mulally is leaving earlier than expected, news reports said Monday. The company is naming a long-term employee as the next in line for the top job. I’m sure General Motors is excited the news isn’t about them.

Mike Ramsey had this story for the Wall Street Journal:

Ford Motor Co. Chief Executive Alan Mulally will leave the company earlier than expected after a more than seven-year run in which he oversaw a significant expansion of the U.S. auto maker, people familiar with the matter said.

Mr. Mulally’s successor will be Mark Fields, 53 years old, a Ford veteran who survived management turmoil in the years before Mr. Mulally’s 2006 arrival from Boeing Co. Mr. Fields, the company’s operating chief, has won praise along with Mr. Mulally for getting Ford’s diverse operations to function as a single business with shared parts, models and goals.

The move may come as soon as July, the people said. Earlier he said he would remain with Ford through at least 2014. Mr. Mulally, in China for the Beijing International Automotive Exhibition, couldn’t be reached on Monday for comment. Last week, he said: “We’ve got a great succession plan. We have nothing new to announce on our succession plan at this point.” Ford declined to comment.

A midyear departure for Mr. Mulally would be earlier than previously indicated. One person close to the situation said the company believes Mr. Fields has proved himself capable in his 15 months as COO. Mr. Mulally also wants to get started with his post-Ford career, likely serving on corporate boards, this person said.

Bloomberg Businessweek said the move would bring in the next chapter for the automaker and recapped Mulally’s bold moves in the top job in a story by Keith Naughton:

The transition will bring an end to a storied chapter in Ford’s history, in which the automaker narrowly avoided bankruptcy thanks to Mulally’s management and a bet-the-business $23 billion loan. Mulally signed off on the loan shortly after arriving from Boeing Co. in 2006 and turned around the automaker by slashing costs and overhauling its lineup with stylish, fuel-efficient models that have won over a new generation of drivers.

 “A lot of great CEOs leave and then there’s chaos behind them,” Executive Chairman Bill Ford, great-grandson of founder Henry Ford, said April 16 on Bloomberg TV. “Alan and I have talked about that — the importance of the final act of a great CEO is having a great transition.”

Ford is planning to make this announcement now to provide clarity on its leadership and an orderly transition of power, the people said. Fields emerged as Mulally’s likely successor when he was promoted to COO in December 2012. Ford had said that Mulally would stay through 2014.

 “There were these rumblings about how long Mulally was going to stay and that caused a distraction,” said Karl Brauer, senior analyst with auto researcher Kelley Blue Book. “They decided ‘We’re not going to wait until everybody’s jabbing them about what’s going on at Ford.’ They’re taking control of the situation and saying, ‘Mulally is leaving and Fields is coming in.’”

Chris Woodyard and Alisa Priddle wrote for USA Today about the contrast between the methodical rise of Fields with the quick ascension of GM CEO Mary Barra:

Unlike the surprisingly quick announcement and promotion of Mary Barra to CEO of General Motors, Fields has been running the daily operations at Ford for 15 months and taken Mulally’s spot in key planning meetings in what is viewed as a thorough and lengthy transition.

Mulally, meanwhile, has said he is concentrating on longer-term strategy and he has already taken a lower profile, such as, for example skipping public appearances at last week’s press preview of the New York Auto Show where the redone 2015 Ford Mustang and the 50th anniversary of the Mustang were featured.

Fields, 53, is credited with restructuring operations in North America prior to his promotion in 2012 to the COO.

At the time of Fields’ promotion, Mulally, 68, confirmed plans to remain with the automaker through the end of this year, but the board of directors is said to be open to an earlier date.

The New York Times story by Bill Vlasic chronicled Fields’ rise through the ranks and his increasing level of responsibility:

Last week, he gave the opening speech at the media previews for the New York International Auto Show, and was host of a company event at the Empire State Building to celebrate the 50th anniversary of the Ford Mustang.

He will inherit some big challenges as the next chief executive, including shepherding the introduction later this year of Ford’s first aluminum-body pickup truck.

“Mark has been well-positioned for this role for years,” said Karl Brauer, an analyst with the research firm Kelley Blue Book. “He certainly has a good sense of the international markets as well as North America.”

Mr. Brauer said Mr. Mulally helped change a culture of infighting that plagued Ford for years before his arrival. “I think Mark learned from Alan that turbulence and rivalries are no good for the company,” he said.

Ford is expected to report healthy first-quarter earnings this Friday, primarily because of the strength of its sales and profits in the United States market.

I’ll bet Barra is slightly jealous of the company that’s being handed to Fields compared with the public relations nightmare that she inherited. It will be interesting to see the next generation of automakers as they move past the threat of bankruptcy and into a healthier operating environment. Both CEOs face challenges.

TBN

Talking Biz News Today — April 21, 2014

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Some of Monday’s top business stories:

The New York Times

Aereo case will shape TV’s future, by David Carr

The Wall Street Journal

Silicon Valley tech giants discussed hiring, say documents, by Jeff Elder
The new winners and losers in America’s shale boom, by Russell Gold and Theo Francis

The Associated Press

UAW withdraws appeal of Volkswagen union vote, by Erik Schelzig
Study: Fuels from corn waste not better than gas, by Dina Cappiello

Forbes

Hasbro swings to a profit on strength in girls segment, by Maggie McGrath

Businessweek

Is Coca-Cola’s pomegranate juice real enough? The Supreme Court will decide, by Susan Berfield

And in local news:

The Daily Tar Heel

Google moves its Chapel Hill location to Franklin Street, by Aaron Cranford

Today in business journalism

Humanizing the cyber security beat
Making business news and information light and approachable
Telling the story behind the headlines
Bartiromo speaks to Forbes about leaving CNBC
The battle rages for attention online

This date in business journalism history

2006: LA Times’ biz columnist’s blog suspended
2012: Bloomberg TV’s Betty Liu getting radio show

Business journalism birthdays

April 19: Megan Rose Dickey of Business Insider
April 20: Inyoung Hwang of Bloomberg News

online

The battle rages for attention online

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There were several stories this weekend highlighting what various companies are doing to try and gain influence with online audiences. While none of the stories were alike, it seemed that they all had an element of grasping for attention in an increasingly crowded market.

The Wall Street Journal had this story by Ian Sherr and Daisuke Wakabayashi detailing the rise in the fight over videogames.

A long-running battle between Apple Inc. and Google Inc. for mobile dominance is spreading to the most lucrative genre of apps: videogames.

The two Silicon Valley giants have been wooing game developers to ensure that top-tier game titles arrive first on devices powered by their respective operating systems, people familiar with the situation said.

In exchange, Apple and Google are offering to provide a promotional boost for these games by giving them premium placement on their app stores’ home pages and features lists, these people said.

Last August, for the launch of “Plants Vs. Zombies 2,” a highly anticipated sequel to a popular zombie-survival strategy game, publisher Electronic Arts Inc. struck a deal with Apple, which promoted the game prominently in its App Store, according to people familiar with the matter.

In exchange, one of these people said, EA agreed to give Apple about a two-month window of exclusivity for the title, which wasn’t released on Google’s Android software until October.

ZeptoLab’s sequel to its popular puzzle game “Cut the Rope,” introduced in December, reflected a similar pattern. The company and Apple agreed to about a three-month window of exclusivity for Apple’s App Store, in exchange for the store prominently promoting the game, one person familiar with the matter said. ZeptoLab launched an Android version in late March.

Apple and Google representatives declined to discuss specifics of their exclusivity efforts. Exclusive titles are a common marketing strategy for videogame consoles, but are new to mobile apps.

Nick Bilton wrote for the New York Times Bits blog about the rise of inflated friends and followers as celebrities and others vie to more quickly go viral. It’s like harnessing the power of the mob, when the crowd is fake:

Whoever said, “Money can’t buy you friends,” clearly hasn’t been on the Internet recently.

This past week, I bought 4,000 new followers on Twitter for the price of a cup of coffee. I picked up 4,000 friends on Facebook for the same $5 and, for a few dollars more, had half of them like a photo I shared on the site.

If I had been willing to shell out $3,700, I could have made one million — yes, a million — new friends on Instagram. For an extra $40, 10,000 of them would have liked one of my sunset photos.

Retweets. Likes. Favorites. Comments. Upvotes. Page views. You name it; they’re for sale on websites like SwenzyFiverr and countless others.

Many of my new friends live outside the United States, mostly in India, Bangladesh, Romania and Russia — and they are not exactly human. They are bots, or lines of code. But they were built to behave like people on social media sites.

Bots have been around for years and they used to be easy to spot. They had random photos for avatars (often of a sultry woman), used computer-generated names (like Jen934107), and shared utter drivel (mostly links to pornography sites).

But today’s bots, to better camouflage their identity, have real-sounding names. They keep human hours, stopping activity during the middle of the night and picking up again in the morning. They share photos, laugh out loud — LOL! — and even engage in conversations with each other. And there are millions of them.

These imaginary citizens of the Internet have surprising power, making celebrities, wannabe celebrities and companies seem more popular than they really are, swaying public opinion about culture and products and, in some instances, influencing political agendas.

And then there’s Facebook, which is rolling out location software to tell you where your friends are hanging out. Seems like a good way to stalk your ex, or gain attention from younger mobile device users. Sarah Frier had this story for Bloomberg:

Facebook Inc. will let people know when their friends are nearby via smartphone notifications, adding features for its growing base of mobile users.

Consumers can customize the tool, called Nearby Friends, to see a certain group of people for a set period of time, or turn it off completely, the Menlo Park, California-based company said yesterday in a blog post. Friends will need to have the feature turned on in order to be seen.

Nearby Friends is Facebook’s latest move into location-sharing capabilities. The world’s biggest social network has added the ability for its more than 1.2 billion members to check into places like they would on Foursquare Labs Inc.’s mobile application. Facebook also has acquired Glancee, a location-tracking startup, and Gowalla, a location-based social network.

Foursquare, which popularized social location sharing, isn’t threatened by Facebook’s new service, Chief Executive Officer Dennis Crowley said in a post on his Tumblr blog. He cited a posting April 16 on the Verge technology news blog saying that people have accumulated many acquaintances on Facebook that aren’t their true friends.

While none of these applications are the same, it’s clear that mobile companies are competing for attention, especially as we all become more reliant on our mobile devices. What’s clear is that the companies that can win the battle for mobile will have a much easier time in the future.

INC  MAGAZINE - April 2014 cover (smaller)

Biz magazines underperform industry in first quarter

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The 14 business magazines underperformed the rest of the magazine industry in the first quarter, according to data from Publishers Information Bureau.

Combined, the business titles reported a 2.95 decrease in advertising revenue to $245.4 million and a 5.9 percent drop in advertising pages to 2,289.43. That compares to a 1.6 percent decrease in ad revenue and a 4 percent decrease in ad pages for the overall industry.

The performance continues a trend of the business titles underperforming the industry. The 14 business magazines reported ad revenue of $1.33 billion in 2013, down 4.8 percent from 2012, according to data from the Publishers Information Bureau. In comparison, the consumer magazine industry reported a 1.1 percent increase in 2013.

The best performing business magazine for the first three months of 2014 was Inc., which reported a 25.9 percent increase in advertising revenue to $8.7 million and a 24.1 percent increase in ad pages to 101.32.

Behind it was Entrepreneur, which reported a 14.3 percent rise in advertising revenue to $23.2 million and a 14.9 percent increase in ad pages to 267.39.

Barron’s also reported a strong quarter, with advertising revenue rising 6.7 percent to $16.8 million and ad pages rising 3.1 percent rising to 305.87.

Among the big three business magazines, Forbes posted the best results, but all saw a decline in advertising revenue and advertising pages.

Forbes posted a 4.1 percent drop in ad revenue to $40.4 million and an 8.7 percent decline in ad pages to 242.98 for the quarter. Bloomberg Businessweek had a 6.6 decline in ad revenue to $33 million and a 10.6 percent drop in ad pages to 204.41, while Fortune had a 7.4 percent decline in ad pages to $38.5 million and a 10.8 percent decline in ad pages to 243.47.

The worst-performing business magazine was Black Enterprise, which had a 44.9 percent drop in ad revenue to $2.1 million and a 46 percent decline in ad pages to 44.61 in the quarter.

To review all of the data, go here.

TBN

Talking Biz News Today — April 18, 2014

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Friday’s top business news stories:

The New York Times

Cost of treatment may influence doctors, by Andrew Pollack
Walmart will enter cash wiring business, by Elizabeth A. Harris

The Wall Street Journal

What’s Barnes and Noble’s survival plan? by Jeffrey A. Trachtenberg

The Associated Press

Venture investments highest since 2001, by Barbara Ortutay
China says one-fifth of its farmland is polluted, by Ian Mader

Reuters

Compensation battle rages four years after BP’s U.S. oil spill, by Jemima Kelly

Businessweek

Patagonia dreaming: Kris Tompkins works to build the best national park, by Brad Wieners

Fortune

Can IPO-bound Zoosk be the Netflix for online dating? by Daniel Roberts

Re/code

The Heartbleed bug is mostly fixed, but not entirely, by Arik Hesseldahl

Today in business journalism

Cavuto of Fox Biz: Happy anniversary, CNBC
Virtu IPO pulled

This date in business journalism history

2011: CNBC.com launches Asia Pacific site
2012: Fake Bank of America release targets Dow Jones, WSJ

Business journalism birthdays

April 18: Linette Lopez of Business Insider

 

virtu-financial-logo

Virtu IPO pulled

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The fall-out from Michael Lewis’s new book on high speed trading was too much for Virtu Financial Inc. The company postponed its initial public offering Thursday. The move came as other recent IPOs have gotten off to rocky starts.

Bloomberg had this story by Leslie Picker and Sam Mamudi:

Virtu Financial Inc., the high-frequency trader that announced plans last month to sell shares, will start marketing the offering weeks later than bankers anticipated, two people with knowledge of the matter said.

Virtu won’t start marketing the initial public offering until after April 20, a process its bankers had expected to begin this week, according to the people, who asked not to be named because the decision is private.

The delay comes amid unprecedented scrutiny of high-frequency traders. “Flash Boys,” the Michael Lewis book released March 31, says high-speed traders, Wall Street brokerages and exchanges have rigged the $23 trillion U.S. stock market. New York Attorney General Eric Schneiderman is examining privileges such as enhanced data feeds marketed to high-speed firms, while the Federal Bureau of Investigation is looking into whether those traders are breaking U.S. laws by acting on nonpublic information.

Chris Concannon, the president of New York-based Virtu, declined to comment on the IPO. The trading firm provides quotes in more than 10,000 securities and contracts on more than 210 venues in 30 countries, according to its IPO filing. It earned money from trading on every day but one in the last five years, according to the document.

In its IPO filing released in March, Virtu said U.S. derivatives regulators are looking into its trading practices.

The decision comes the day after the Chinese version of Twitter, Weibo, failed to sell as many shares as they wanted. The stock climbed 19% in trading Thursday. The Wall Street Journal story by Paul Mozur, Telis Demos and Matt Jarzemsky:

Weibo, which is growing fast but posted a net loss last year, raised $286 million in its initial public offering Wednesday. The amount fell short of expectations because the price of $17 a share was at the bottom of the projected range of $17 to $19, and the company sold 16.8 million shares, fewer than the 20 million expected.

Despite that sluggish start, the stock surged in its first day in the market. The company’s American depositary shares, which trade under the symbol “WB,” hit an intraday high of $24.48, up 44%.

In all, nearly 33 million Weibo shares exchanged hands Thursday.

The offering comes amid broad weakness in the U.S. IPO market and a month-long pullback in stock prices for both Chinese and U.S. Internet companies, including Twitter, whose shares have fallen 18% since the beginning of March.

The New York Times story by Michael J. de la Merced pointed out that Sabre, a travel technology company, also priced below expectations, but that shares climbed 4 percent on the first day of trading:

Both companies made their trading debuts during one of the roughest times for new stock sales in weeks, as shareholders have shown ambivalence about riskier investments. Until earlier this month, I.P.O.s had been on a tear, with many offerings pricing above expectations and then trading even better once they made their official market debut.

As investors began to fall out of love with fast-growing sectors like Internet and biotechnology, however, many prospective I.P.O.s began to falter as well, sending indexes like the Nasdaq in free fall on some days. An index of shares in newly public companies created by Renaissance Capital is down more than 1 percent so far this year.

Thomas Klein, Sabre’s chief executive, said in an interview that he wasn’t surprised about the change in investor sentiment since his company filed a prospectus in January. Still, he added that the travel services provider viewed its listing as the first step in a long-term journey toward becoming a public company after seven years of ownership by private equity firms.

“We were pleased with the decision to change the size a little bit,” he said.

Writing for Forbes, Steve Schaefer predicted that investors are beginning to steer away from IPOs:

The two-year anniversary of Facebook’s 2012 IPO is just a month away, and if recent trends continue the demand for new offerings may start resembling the freeze that followed the social network’s debut.

After that botched open, it took weeks for the next batch of IPOs to come through, and in the midst of the hottest IPO market since the dot-com bubble there are signs that conditions have gotten overheated and investor appetite is waning.

For one thing, the number of unprofitable companies flowing through the IPO pipeline has swelled. Jason Goepfert, author of the SentimenTrader Daily Report, cites a statistic that 83% of deals in the last three months were from money-losing companies, the highest such figure since the first quarter of 2000 (h/t to the Wall Street Journal).

That alone doesn’t mean the IPO market is going to grind to a halt. Far more important are the returns for both the broader market and the most recent predecessors to companies going public today. Unfortunately for the optimists there is softness on that front as well.

The Nasdaq Composite and Russell 2000, home to high-growth names in sectors like tech and biotech that are well-represented in the IPO market, are each in negative territory for the year, down 1.9% and 2.7% respectively.

It may that there were just a few too many tech companies looking to tap the markets or that investors are pulling back from the market in general. But those who got in on the ground floor of these are happy about their decision after today.

TBN

Talking Biz News Today — April 17, 2014

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Thursday’s top business news stories:

The Wall Street Journal

Amazon workers in Germany strike again, union says, by Sarah Sloat

The New York Times

When ‘liking’ a brand online voids the right to sue, by Stephanie Strom

Reuters

Retailer Michaels Stores confirms payment card data breach, by Lehar Maan
GM says recalled cars safe, but has not tested for knee-bump danger, by Julia Edwards and Eric Beech

The Associated Press

Facebook rolls out location-sharing feature, by Barbara Ortutay

Bloomberg

Jobless claims in U.S. hover near lowest level since 2007, by Victoria Stilwell
PepsiCo quarterly profit rises 13%, by Duane D. Stanford

Forbes

The same-day war: Amazon, Google and Wal-Mart race to bring your groceries, by Jeff Bercovici

Today in business journalism

WaPo hires Marte from Marketwatch
WaPo hires Paquette for biz news desk
WSJ names Austin its deputy tech editor
A montage of 25 years of business coverage on CNBC
Google has rare stumble

This date in business journalism history

2008: TheStreet.com ME leaves for Dow Jones Newswires
2011: Ex-SF Chronicle biz columnist dies

Business journalism birthdays

April 17: Tim Mullaney of USA Today

 

Google

Google has rare stumble

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The company is so ubiquitous that its name is a verb. But being part of the lexicon isn’t a pathway to riches. What’s most interesting about Google’s earnings this quarter is the business media’s portrayal of a 19 percent rise in revenue as a misstep.

Rolfe Winkler and Alistair Barr wrote for the Wall Street Journal that increased costs caused the drop in profit:

Fast-rising expenses eroded Google Inc.’s first-quarter profits, disappointing investors and sending Google shares lower in after-hours trading.

The Internet-search giant said revenue for the quarter rose 19% to $15.4 billion from $13 billion a year earlier, excluding the Motorola Mobility business Google plans to sell to China’s Lenovo Group Ltd. Analysts had projected revenue of $15.5 billion on that basis, according to S&P Capital IQ.

But expenses grew faster—at 23%. As a result, Google’s net income increased 3% to $3.65 billion, or $5.33 a share, from $3.53 billion, or $5.24 a share. The figures were adjusted for the pending Motorola sale and a 2-for-1 stock split.

Excluding stock-based compensation and other items, Google said earnings were $6.27 a share; on that basis, analysts had predicted $6.41 a share.

“The top line was pretty good, but the margin compression probably disappointed the market,” said Brian Wieser, an analyst at Pivotal Research Group. “The margin erosion trend seems to be well in place.”

The New York Times headline said earnings “disappoint” in a story by David Streitfeld, which pointed out Google is making acquisitions in order to post growth — at some point:

Its core digital advertising business is so dominant that analysts are questioning just how much it can continue to grow. So Google is unleashing its vast cash hoard on robotics, artificial intelligence, smart thermostats and, just this week, high-altitude drone satellites.

The only thing all these acquisitions have in common is a focus on the future — often, the distant future.

The risk in thinking about what will be big in 2050, however, is that you can lose sight of 2014.

Google’s first-quarter earnings report, released after the market closed on Wednesday, surprised Wall Street. The company has traditionally gushed profits without breaking a sweat. Now it takes more of an effort.

One big reason was a problem of several years’ standing: Internet users are migrating to mobile devices, but ads on phones and tablets still do not have the familiarity and appeal they do on bigger computers. And they are not as profitable for Google. Google’s ad volume jumped 26 percent in the quarter, which sounds good but is less than expected, while the amount advertisers pay dropped 9 percent, which sounds bad and is.

The CNET story by Seth Rosenblatt led with the fact investors didn’t like the news either:

Google’s shares fell sharply in after-hours trading Wednesday following first-quarter earnings and sales that missed Wall Street’s expectations, thanks in part to its continued acquisition binge and the ongoing shift in ad revenue from desktop to mobile.

The stock was down 5.85 percent to $524 per share immediately after the markets closed.

Colin Gillis, senior technology analyst at BGC Financial, said “a little [investor] pullback is healthy.”

“[Cost-per-click on] mobile’s a major problem. People have had a decade to optimize their [desktop] sites,” he said. Even though mobile ad revenue is rising, it’s not rising as fast as desktop is shrinking.

Kevin Shalvey wrote for Investor’s Business Daily that Google’s fall was based on lower pay ad clicks:

Google since mid-2011 has focused on building mobile-ad technology, in part to increase revenue from users in emerging countries where smartphones are used more widely than traditional desktops.

But worldwide paid clicks on ads grew just 26% in Q1, down from 31% growth in the three months prior. Analysts expected 29% growth, says Seyrafi.

Advertisers still aren’t willing to pay as much for a click on a mobile ad. Google’s overall cost-per-click, or CPC, rate slipped 9% from a year earlier, although it remained unchanged from Q4.

“I believe, in the medium to near term, mobile pricing has to be better than desktop,” Chief Business Officer Nikesh Arora told analysts on the post-earnings conference call.

CNNMoney attributed the stumble to mobile in a story by James O’Toole:

The challenge for Google is convincing marketers to pay as much for mobile ads as they do for desktop ads, a task that’s become increasingly pressing as Web usage shifts to smartphones.

Google Chief Business Officer Nikesh Arora said in a conference call Wednesday afternoon that the company’s mobile ad revenue is being held up in part because merchants haven’t spent enough time developing their mobile sites, assuming that customers will make more purchases via desktop.

“The journey is just beginning for advertisers on the mobile side,” he said. As advertisers begin to see the potential of mobile ads, including location targeting, Arora added that the gap between desktop and mobile ad rates would likely close.

“Right now we can lead the horse to water, but we can’t make it drink,” he said.

Part of the way Google is addressing this issue in the meantime is through the “enhanced campaign” strategy it introduced last year, which requires advertisers to buy across multiple platforms.

Taken all together this might indicate that Google will likely continue to see earnings growth slow in the near-term. What isn’t so clear is how they’re positioning themselves for the future. If you believe in the acquisitions and that cost cutting could come into play, then this might be a temporary setback. Otherwise, it could be the beginning of a long decline.