Vishesh Kumar
Investors looking for Google(GOOG Quote - Cramer on GOOG - Stock Picks) to quickly cash in on its YouTube acquisition shouldn't hold their breath.
Taking advantage of the enormous graphic- and video-advertising opportunities offered by the popular video site seems like the next logical step and the easiest money for the search giant to make. But at the Morgan Stanley Technology Conference on Monday in San Francisco, CEO Eric Schmidt hinted that Google may be looking elsewhere for revenue first. He declined to give investors a sense of when Google could start gaining from the $1.7 billion purchase of YouTube in October. But the premium version of Google Apps, an online suite of software applications aimed at small businesses that Google announced in February, is likely the company's next major driver of revenue outside of search, Schmidt said at the conference. "The other nonsearch businesses are too early to forecast. When they hit, they are likely to move quickly -- in which case we will let you know," Schmidt said. The CEO's comments come at a time when Google's stock has stagnated. Shares traded at $455 Thursday, levels they first hit in October, as investors wait to see where the company will turn for new revenue. It's surprising that Google would point to this service, which it found a way to make money from only two weeks ago, as its next big moneymaker. Google Apps is meant to be cheap: Though its low price of $50 a year per account is intended to boost adoption rates, Google will have to work extremely hard to collect that revenue, making it anything but cheap.
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