Google's Red Flag Was Lost on Media

The media overlooked a potentially negative factor when reporting the company's earnings.
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Maybe it's the summer blues. Or maybe the layoffs at newspapers and magazines are what leave coverage of important issues in business, sports and politics to 14-year-old unpaid interns.

It could be just a coincidental run of bad luck, but The Business Press Maven has been playing the press-release game way too often lately -- even, most recently, with

Google

(GOOG) - Get Report

.

They Just Don't Get Google!

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What's the press-release game?

When a company reports, it issues a press release. It's basically a one-page document -- easy to read -- with a dressed-up-for-dinner take on the company's quarter. You often have to delve into the financials and elsewhere for texture and dirt, but the more-forthright companies will feature one or two negatives, mitigating factors or other caveats fairly prominently.

Since it's only a page and since negatives jump out, the business media should pick up on such comments, right? Wrong.

Just this week, we saw the business media report in near unison that

Intel

(INTC) - Get Report

issued better-than-expected earnings and all the great things that meant, after Intel itself had admitted way up top in its press release that an unexpectedly favorable tax rate and lower restructuring costs --

one-time factors

-- were the cause.

So I decided to play the press-release game with Google, combing through the company-issued document for some important cautionary factor that was all but ignored by the business media even though it was hiding in plain sight.

Indeed, something jumped out at me quickly. Anytime you hear that a portion of a company's business surged past the 50% mark, you have to take notice, and that's what we saw quickly under the

"International Revenue" heading

:

"Revenues from outside of the United States totaled $2.80 billion, representing 52% of total revenues in the second quarter of 2008, compared to 48% in the second quarter of 2007 and 51% in the first quarter of 2008."

By itself, that sounds like a positive. But then read the next two lines:

"Had foreign exchange rates remained constant from the first quarter of 2008 through the second quarter of 2008, our revenues in the second quarter of 2008 would have been $88 million lower. Had foreign exchange rates remained constant from the second quarter of 2007 through the second quarter of 2008, our revenues in the second quarter of 2008 would have been $249 million lower."

How's that for a big red danger sign? You'd figure, at the very least, that the impact of exchange rates on the company's earnings would be worth mentioning, right? As a factor that might come into play in the not-so-distant future?

Let's take a quick poll.

I had hope for

The Associated Press

, which mentioned Europe in its lead and, like others, highlighted the half-of-revenue thing, but it included nothing about the potential impact of foreign currency.

The New York Times

had a cutsey lead about how Google and

Microsoft

(MSFT) - Get Report

, which also disappointed, were like two brainy nerds who failed an exam. The story spent some time on possible positives looking forward, but it mentioned nothing at all about this possible negative, which Google itself had put right out there.

Radio silence on the issue came from

the Financial Times

too.

Ditto for

Reuters

.

We could go on. And on. It wouldn't be such an oversight if these media outlets had had to dig for this potentially important line in Google's press release. But there it was, jumping up and down, just asking to be mentioned alongside other factors related to the company's future. International is, after all, now more than half Google's business.

Ugh. The press release-game makes The Business Press Maven want to play the crying game.

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven? column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;

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