Whenever an online advertising forecast is issued, whether analysts see a reason to pullback or raise expectations, it mostly has to do with how Google (NSDQ: GOOG) is performing. The company is that dominant. So when analysts pore over Google’s earnings this afternoon, there may be some disappointment that the company’s Q3 performance was just a little less stellar than Q2’s blockbuster period. (As it turned out, investors expectations were beat during Larry Page’s first full quarter as CEO, sending share up 5 percent minutes after the earnings release).
There have also been reports that Google+, the company’s attempt at a “Facebook killer,” may be losing steam as well following its much hyped and highly selective beta test and more recent public opening. The company says that Google+ just passed the 40 million user mark, which is still a far cry from Facebook’s 800 million active members. But it’s a start and Google is nothing if not patient.
Some of the revenue highlights from Google’s Q3:
— YouTube and Google+: Google-owned sites, including YouTube and Google+ generated revenues of $6.74 billion, or 69 percent of total revenues, in the third quarter of 2011. This represents a 39 percent increase over third quarter 2010 revenues of $4.83 billion.
— Google Network: Google’s partner sites generated revenues, through AdSense programs, of $2.60 billion, or 27 percent of total revenues, in the third quarter of 2011. This represents an 18 percent increase from revenues of $2.20 billion during the same period last year.
— International: Revenues from outside of the United States totaled $5.3 billion, representing 55 percent of total revenues in the third quarter of 2011, compared to 54 percent in the second quarter of 2011 and 52 percent in the third quarter of 2010.
Google can only really be judged against its own success, and the performance of its all-important paid clicks were a marked improvement over Q2. The amount of clicks on its owned sites and its AdSense partners’ properties were up 28 percent over the third quarter of 2010. This segment was also an improvement over Q2. Paid clicks were 13 percent higher than Q2, which a bit more uneven for Google, as the segment decreased by 2 percent from Q210.
The costs of getting those paid clicks were a bit more mixed last quarter. While traffic acquisition costs as a share of revenue fell a bit to 24 percent from 26 percent, Google spent 22 percent more on driving users to its sites.