Gist: Giant Google disappoints investors as advert rates decline  (Read 1030 times)

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

Google on Thursday, reported consolidated revenues of $15.42bn for the quarter ended March 31, 2014, an increase of 19 per cent compared to the first quarter of 2013.

Profits were also up by three per cent to $3.45bn.

However, the cost per click on its advertising fell by nine per cent, 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 advert 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 Operating Sysyem, 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 $1.45bn, $74m higher than what was included in net loss from discontinued operations.

The company ended the quarter with just under $60bn of cash in the bank.

-punch


 

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