Google beats market expectations but core questions remain


Google announced second quarter earnings that showed the company is still enjoying strong growth. The company’s earnings beat analyst expectations but its crucial ‘cost-per-click’ metric for ads continues to decline, likely increasing the pressure on Google to find a way to diversify from its long time reliance on search advertising.

The company announced Thursday that its non GAAP earnings per share was $10.12. Analyst consensus was $10.04. Revenue excluding traffic-acquisition costs rose 21 percent from a year ago to $8.36 billion but that number fell slightly short of theĀ $8.41 billion that was the consensus estimate from Thomson Reuters. On a GAAP basis, which includes the revenue Google earnings before sharing a portion with partners, revenue was $12.2 billion, up 35 percent from last year.

The company’s release reflected that it is selling more ads in more places to fuel its growth. A trouble spot remains, however, in that the amount of money it gets for each ad continues to decline. The “cost per click” declined by 16 percent from the same quarter a year ago and by 1 percent from the previous quarter.

The latest earnings are also significant in that they are the first to include figures from Motorola Mobility which officially became a part of Google in May. The phone maker contributed $1.25 billion or about 10 percent of Google’s consolidated revenue but Motorola’s operating income reflected a net loss.

More to come.

You're subscribed! If you like, you can update your settings


Comments have been disabled for this post