Google is hiring "the most powerful woman on Wall Street" – Morgan Stanley's Ruth Porat – as its new CFO. With the change comes speculation that the search giant will control costs as it prepares for new ventures like autonomous cars and Google Glass.
Porat played an instrumental role reining in costs across several areas during her 28-year tenure with Morgan Stanley. Google is hoping that 57-year-old Porat's experience and leadership will help bring a boost to the fortunes of the company.
Though Google remains profitable, it has missed the expectations of analysts for several quarters in a row. Porat will need to restore the confidence of both investors and Wall Street as Google looks to increase revenue stream in new terrain.
Google has embarked on numerous projects, investing in self-driving cars, space travel and biotechnology — the success of which is still speculative as of now. The shift of focus from ads – Google's primary source of revenue – to other proposed revenue streams is making investors antsy.
Though Google's revenue grew by 19 percent in 2014, the company also saw an alarming increase of 23.4 percent in total expense. This trend has investors worried — and not without reason.
Google's search engine market share has also seen a minor slide and analysts are concerned that its advertising business may slip too. But with Porat coming on board, analysts are optimistic that Google's acquisitions will pick up.
They also expect the Wall Street background of the new CFO will make her well-tuned to their apprehensions.
Mark Mahaney, an analyst with RBC Capital, expects Porat to bring two main things to the table as Google's new CFO.
"One is cash back to shareholder, not this year, but potentially within the next 12 to 18 months. And secondly, slightly greater financial discipline," said Mahaney in an interview with CNBC. Mahaney also thinks Porat will ensure Google's future investment.
On Tuesday, March 24, Google's shares finished over 2 percent higher, following the announcement of Porat's appointment announcement.
