Google's Executive Chairman Eric Schmidt addresses the 9th Global Competitiveness Forum. With Google announcing second-quarter financial results Thursday, Wall Street is wondering if the company can rein in expenses.
Google's Executive Chairman Eric Schmidt addresses the 9th Global Competitiveness Forum. With Google announcing second-quarter financial results Thursday, Wall Street is wondering if the company can rein in expenses. - 
Listen To The Story
Marketplace

Google announces second-quarter financial results after the closing bell on Thursday. Investors, who have been worried about how much the tech giant is bringing in and how much it's spending, will be paying close attention to see if Google's reining in costs.

Earlier this week came indications Google might be tightening up the ship by hiring fewer people, with 1,810 new hires in the first quarter, contrasted with an average of 2,435 new employees per quarter last year, according to the Wall Street Journal. 

Mark Mahaney of RBC Capital Markets says Google has to do more to soothe worried Wall Street. "There's concern that Google's core advertising revenue rates are slowing. That they cannot or will not do a tough enough of a job ... managing expenses," Mahaney says.

Among the concerns is that Google is losing ground in search ads to mobile platforms like Facebook and others.

"All those concerns that people have, they look backwards," says Carlos Kirjner of Bernstein Research, who believes Google still has room to grow. The company is investing in new technologies like self-driving cars, which could pay off in the future. It's also investing in current moneymakers: Android and search.

"All of these require computer science, and engineering and infrastructure," Kirjner says. 

Still, Google spent an unusually high amount last year, Kirjner says, and he's looking for that spending to slow down.

“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VA

As a nonprofit news organization, what matters to us is the same thing that matters to you: being a source for trustworthy, independent news that makes people smarter about business and the economy. So if Marketplace has helped you understand the economy better, make more informed financial decisions or just encouraged you to think differently, we’re asking you to give a little something back.

Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.