Google acknowledged that it erred last week when it posted on its Web site internal projections not meant for the public.
The Internet search giant said that it inadvertently disclosed its closely guarded financial projections and also said it let slip information about a personal, digital storage service that is in the works.
Google Inc. admitted it told analysts more than it wanted last week.
According to documents filed with the Securities and Exchange Commission, the Mountain View-based Internet titan inadvertently posted speaker notes that had been prepared a few months earlier for an internal presentation on product strategy.
The notes, which were posted on Google’s investor relations Web site, described the company’s core Internet advertising business as “healthy and growing” and “on a strong trajectory.”
The notes said the business was “projected to grow from $6 billion this year to $9.5 billion next year based purely on trends in traffic and monetization growth.”
Google explained in the filing that these estimates were part of an internal report on product strategy from last year. "These notes were not created for financial planning purposes and should not be regarded as financial guidance, Google wrote in its filing."
A mistake was also made when Google said that "AdSense margins will be squeezed in 2006 and beyond." That statement "does not reflect Google’s current expectations," executives wrote in the SEC filing.
The Mountain View Company acknowledged the financial gaffe in a regulatory filing with the Securities and Exchange Commission, said the notes “were not created for financial planning purposes, and should not be regarded as financial guidance.”
While Google did not mean to add information on stock-based compensation for employees and directors, the company acknowledged that those numbers were correct. It said that a stock-based compensation charge of $342 million granted prior to 2006 is a "materially accurate reflection of Google’s current expectations."
It all stems from an online slide show the company posted following its annual analyst day meeting. The slides were intended to give anyone a peek at what the company told Wall Street. Inadvertently, the slides also contained attached "notes" that divulged more than Google wanted.
Google slipped up twice last week when it released information not intended for the public. The company also unwittingly released plans to offer online storage to users.
Sasa Zorovic, an analyst for Oppenheimer & Co., called the inadvertent release sloppy but added that the data was largely in line with what analysts were expecting. He criticized Google’s policy against giving guidance, saying "it is not a best practice and does nothing but frustrate their investors."
Earlier, bloggers had found other hidden notes in the online postings that suggested Google was preparing to offer an online storage service that would give users an alternative to storing data on their personal computer hard drives. Such a service could allow users to get access to their files wherever they are, whether from a laptop, cell phone or personal digital assistant.
Called GDrive, the service is part of a bigger ambition at Google to provide infinite storage, so far mentioned only in broad terms by company executives. If fully realized, users would be able to store all of their data online with the company, including e-mails, photographs and bookmarks.
Google called storage a great value to users and added that the theme fits into its strengths against rival Microsoft Corp. Left unsaid was that the more users who store files with Google, the less they would need Microsoft’s desktop software.
Google acknowledged the high costs of infinite storage in the notes. Existing efforts, according to the company, face bandwidth and storage constraints.
The notion of online storage raises significant privacy concerns. Any user files kept by a company could be subpoenaed or hacked.
In its notes, Google responded to any potential worries by saying "we can make your online copy more secure than it would be on your own machine."
No dates were given for any new products. Lynn Fox, a Google spokeswoman, said, "We are always working on new ways to enhance our products and services for our users."
Accidentally releasing internal information is just one in series of recent speed bumps for Google. The company recently had to issue a clarification after its chief financial officer, George Reyes, said at an investor conference that the company’s growth is slowing.
"We are in the strongest position that we have ever been," chief executive Eric Schmidt told analysts.
In addition to the revenue numbers, Google’s notes spoke of the company’s efforts to exceed its projections. In one passage, the company said, "To really get down to brass tacks, we are going to: Execute well on our core ads projects to help us exceed the $9.5 billion target."
The regulatory filing, made after the market closed, did not cause much of a stir on Wall Street. In after-hours trading, Google’s shares were down $6.66, or nearly 2 percent, to $357.79 in Nasdaq Stock Market trading.
Google’s mistake was especially embarrassing because the company, unlike most companies, refuses to give future financial guidance. As part of its filing, Google advised investors to disregard the numbers, saying that they were merely speaker notes prepared as much as six months ago for an internal presentation.
Last month, Dell apparently goofed when it allowed specifications for the Dell Inspiron e1405, as well as other unannounced Dell computers and products, to briefly be exposed by Google’s search engine. The spreadsheet was removed from a Dell FTP site and from Google’s cache.
A new version of the analyst day presentation has been made available on Google’s Web site, excised of all the inadvertently released notes.