Google Disappoints Investors As Ad Rates Decline

Published on:

By:

Google's shares have declined over concerns that its advertising rates are declining despite posting higher overall revenues.

Google reported consolidated revenues of USD15.42 billion for the quarter ended March 31, 2014, an increase of 19% compared to the first quarter of 2013.

Profits were also up by 3 percent to USD3.45 billion.

However, the cost per click on its advertising fell by 9 percent, meaning the company has to drive more clicks and more page traffic just to stand still, let alone increase revenues.

As the company is heavily dependent on offering advertising funded services as cost-free to the consumer, the ad click revenues are a critical measure of performance.

Much of the decline can be put down to increase use of mobile devices, which tend to pay far lower rates than desktop adverts. Google is particularly exposed to that decline as it is the main backer of the Android OS, and earns revenue when its owns web services are included within the handsets.

Had it been presented as an operating segment, the Motorola Mobile segment revenue for the first quarter of 2014 would have been $1.45 billion, $74 million higher than what was included in net loss from discontinued operations.

The company ended the quarter with just under USD60 billion of cash in the bank.

Page Tools

 

Tags: google 

Sign up for our free daily email news alerts

Sample Copy