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 the $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.