The news at a glance

Tech: Google’s ‘disappointing’ results

There were “no champagne toasts” at Google last week when the tech giant reported quarterly revenues of $10.6 billion, said Claire Cain Miller in The New York Times. It was Google’s best quarter ever, but Wall Street analysts had expected better and sent the company’s shares tumbling 9 percent. Suddenly “Google looks a bit mortal,” said analyst Colin Gillis. Wall Street’s concerns center on the company’s long-term ad strategy. Last quarter, even as the number of clicks on Google’s ads rose by an impressive 34 percent, the average amount advertisers paid for each of those clicks dropped by 8 percent. The price drop was partly due to the shift toward mobile ads, which cost advertisers less. But analysts fear it may be a sign of sliding profit margins for Google.

“In absolute terms, these were hardly problematic results,” said Zachary Karabell in TheDailyBeast.com. Yet they highlight Google’s failure so far to build another significant source of revenue alongside search ads. Its Android operating system has been “wildly successful,” but making it into a profit center will be challenging. The same goes for Google+, the company’s new social network. These businesses deserve to be developed, but “the Internet age does not afford any company time to figure things out.”

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Tech: CEOs at BlackBerry maker step down

The embattled co-CEOs of Research in Motion, the maker of the BlackBerry, resigned this week in a “long-awaited shake-up,” said Bernard Simon in the Financial Times. Mike Lazaridis and Jim Balsillie have been under fire because of the BlackBerry’s sliding market share against smartphone rivals. The Canadian company’s shares have lost more than three quarters of their value in less than two years. The new CEO, Thorsten Heins, who joined RIM in 2007, may not calm exasperated investors, who are already frustrated “that the company did not turn to an outsider” for new direction.

Economy: Cities still haven’t bounced back

Less than a tenth of America’s cities have recovered the jobs they lost in the economic downturn, said Michael Cooper in The New York Times. Just 26 of the country’s 363 metropolitan areas have bounced back to prerecession employment levels, according to a report released by U.S. mayors, and 80 of the hardest-hit metro areas may not fully recover for at least five years. “I’ve been mayor for three years now, and all I’ve known is an environment of cuts and significant deficits,” said Ashley Swearengin of Fresno, Calif.

Publishing: Apple expands into education

Apple is “hoping to get students to trade their book bag for an iPad,” said Jessica E. Vascellaro in The Wall Street Journal. Last week the company, working with McGraw-Hill and other publishers, began selling e-textbooks for such high school subjects as algebra, biology, and chemistry. The e-books, which feature audio, video, and interactive quizzes and diagrams, cost less than $15 each, a fraction of their print price. But the iPad’s $499 starting price remains “a barrier to adoption for cash-strapped schools.”

Wall Street: More insider trading charges

Seven hedge-fund managers and analysts were charged with insider trading last week in what the government called “a stunning portrait of organized corruption,” said Patricia Hurtado in Bloomberg​.com. The circle of friends allegedly used tips from a Dell employee to make nearly $62 million trading the computer maker’s shares. “It was a club where everyone scratched everyone else’s back,” said U.S. Attorney Preet Bharara. One fund, Diamondback Capital Management, has agreed to pay a $3 million fine and forfeit $6 million in illegal profits.