On Wednesday, Google released its earnings statement for Q1 of 2014, reporting revenue of $15.4 billion, up 19 percent year on year, and an increase in net income.
But the numbers come in shy of analysts’ expectations, which projected the company to rake in $15.58 billion. Google’s earnings-per-share came in at $6.27 — roughly five cents off from analysts’ projections of $6.33 to $6.41.
According to Google, traffic acquisition costs increased to $3.23 billion in the first quarter of 2014, representing 23 percent of advertising revenues. Mean while, cost-per-click continues to go down, decreasing 9 percent over the first quarter of 2013 and remaining steady throughout the year, although the number of paid clicks on its advertising network jumped 26 percent compared to the same period last year.
One major point explored on the company’s earnings call Wednesday afternoon was the gap Google sees between declining cost-per-click numbers and the slow rise in value of mobile ads. When asked during the company’s earnings call, Nikesh Arora, SVP and CBO at Google, said that the gap will close in due time as mobile information becomes richer for ads:
The way to think about it is that in mobile, you have location and context of individuals, which you don’t have on the desktop. The more you know about the user in their context, the more effective advertising you can provide them. There’s a whole bunch of building blocks that need to come into play to close the gap.
“Motorola had a great quarter in Q1, with the Moto G showing strong sales momentum, especially in emerging markets,” said Google CFO Patrick Pichette on the company’s earnings call. “The team continues to be hard at work, and we look forward to seeing them join up with Lenovo soon.”
This article was updated to include content from Google’s earnings call.