P&L

Mobile is still weighing on Google

July 18, 2013
July 18, 2013
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The numbers: Not great. The search giant reported net income for the second quarter of $3.23 billion, up 16% from the prior year. Sales, excluding the costs of payments to partner sites for traffic, amounted to $11.10 billion, up about 16% from the same period last year but shy of the $11.38 billion analysts expected, according to FactSet.

The takeaway: Google is still struggling to monetize mobile. Cost per click—a metric that actually measures the price advertisers pay Google each time their ads are clicked on—decreased roughly 6% versus the second quarter of 2012. That reflects the lower prices advertisers are paying for mobile ads. Cost-per-clicks decreased 4% last quarter, year-over-year. And more and more of Google’s traffic is coming from mobile.

What’s interesting: Google chief Larry Page talked up the company’s new Moto X smartphone in recent post-earnings conference calls with analysts. The Phone is going to be assembled in Ft. Worth, Texas—though parts are coming from all over including Taiwan and South Korea—and is expected to go on sale this summer. And reports indicate that mobile device suppliers (paywall) are rooting for a successful launch that could break up the Apple-Samsung dominance of the smartphone business.

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