Google can’t stop talking about mobile until it comes to real numbers

“Mobile revenue was *this* big.”
“Mobile revenue was *this* big.”
Image: AP Photo/Jeff Chiu
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Google—soon to be Alphabet—announced a strong third quarter yesterday (Oct. 22). Chief financial officer Ruth Porat credited a combination of ads on YouTube and “substantial growth” in mobile search for driving quarterly revenue to $18.7 billion—13% more than a year ago. New Google CEO Sundar Pichai even added that “search traffic on mobile phones has now surpassed desktop traffic worldwide.” Wall Street responded positively to that news, and Google’s promise that once the company starts reporting as Alphabet next quarter, there will be greater disclosure on the health of its different business lines. Google’s stock price was up nearly 10% on the news today.

But even with all this bullishness on mobile (the word was mentioned dozens of times on the call), Google didn’t provide any meaningful numbers to back up its management’s claims that mobile is driving growth. Even the stat on mobile searches isn’t new—Google said the same thing back in May. Pichai mentioned that Google had now indexed over 100 billion links from within third-party mobile apps—which is great if you believe the homescreen is dead—but there wasn’t really any indication on how the company would monetize those links.

Google’s core business is still serving ads, on search results pages and around the web, whether that’s on mobile or desktop. While Google didn’t go into any specifics on how its advertising is working on mobile—and it does seem to be—Wall Street was nevertheless pleased with the remarks. Jefferies analysts suggested the “results should quiet that talk, for now” and analysts at Bernstein said search will still drive profits for the company even as more searches happen on mobile, mainly because of Google’s success in getting people to use Chrome, Android, and its Google apps.

Perhaps when the company announces its first earnings as Alphabet next quarter there will be greater clarity on how mobile will keep the company moving forward. Porat announced that Alphabet will “provide additional detail” on Google, as well as every separate Alphabet business—like Nest, Life Sciences, and its X lab—which will now be referred to as “Other Bets.” But for now, we’ll have to take Google at its word. Pichai said he wants mobile search to be as compelling or even better than desktop search. He conceded, though, that it’s not quite there yet: “It will take us time to get there,” he said. “We’re going to be focused till we get there.”