For first time, analysts get inside glimpse of Google

SAN FRANCISCO — Google provided stock-market analysts with a rare peek at its mind-set yesterday but steadfastly refused to forecast its financial future as the online search leader navigated through another rite of passage in its short life as a publicly held company.

The four-hour meeting at Google's Mountain View, Calif., headquarters represented the company's first extensive discussion about its opportunities and challenges since completing its closely watched initial public offering of stock nearly six months ago.

Most of the nation's biggest publicly held companies meet with Wall Street analysts at least once a year to review a wide range of topics, including their financial outlook.

Reflecting its iconoclastic culture, Google has banned its management from projecting profits — a policy that limited the disclosures made to the roomful of analysts who make the earnings estimates that influence the company's stock.

The tight-lipped approach hasn't hurt the company's stock so far, largely because Google's first two quarters as a public company have been far better than anticipated. Since going public at $85, Google's shares have more than doubled, although they dropped $7.06, or 3.6 percent, to close yesterday at $191.58.

Although they didn't offer any earnings guidance, Google executives assured analysts the company is constantly looking for ways to make more money. "We are trying to be ruthlessly efficient in how we run our business," Google co-founder Larry Page said.

With finances largely off the table yesterday, Google's top executives spent most of their presentations talking broadly about the company's agenda and their approach to an expanding menu of products.

Some key points:

• Google is likely to require its users to begin providing personal information to use some of its products and services, said CEO Eric Schmidt. Requiring people to provide their identity and a password to gain service access is common at many Web sites but would be new for Google. Having more personal information would enable Google to offer more useful improvements, Schmidt said. He didn't provide a timetable or specify which services might require registration.

• Google executives operate under the assumption that 70 percent of the company's resources should be focused on its search engine, even though it accounted for virtually all the company's 2004 revenue of $3.2 billion. Another 20 percent of Google resources is devoted to search products, such as the shopping comparison site Froogle, and the remaining 10 percent is focused on experimental services, such as a three-dimensional mapping program called Keyhole and an online social-networking site called Orkut.

• Don't be surprised if many of Google's products, including its widely read compilation of recent news stories, remain in the test phase known as "beta" for as long as five years. Page said the "beta" tag is a sign that Google engineers still anticipate making significant improvements to the service.

• A hiring spree that has added 2,300 employees in the past two years still hasn't been enough to satisfy Google's expansion plans. Google co-founder Sergey Brin said the company would like to hire employees at a more rapid rate but has trouble finding enough applicants that meet its high standards.

• Page downplayed recent media reports that the company is preparing to branch into new directions by introducing a Web browser, a service for registering Web domains and telephone service over the Internet. "Most of the things we read are a surprise to us," Page told analysts.