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Friday, 19 July 2013 07:29

Google earnings fail to impress

Written by Peter Scott

Ad rates still going down, Android going strong

Google missed Wall Street estimates on Thursday, announcing a lacklustre quarter caused by poor ad performance and Motorola restructuring charges. The report pushed its shares down 5 percent in after-hours trading.

It wasn’t all bad news though. Revenues rose 19 percent to $14.1 billion, barely short of estimates. However, profit per share was $9.56, down from $10.12 last year. The main problem appears to have been ads, again.

Mobile ad prices are still dropping and they are already some 40 percent lower than PC ads. Overall ad prices fell 6 percent last quarter and there is no bottom in sight. Google Ads were a staple for many small publishers and bloggers for a decade, but since then the service has become a joke. Many small publishers relying solely on Google Ads can barely generate enough cash to pay their electric bill, let alone hosting.

The earnings call revealed some fresh Android numbers as well. Larry Page said there are some 1.5 million Android activations on a daily basis. More than 50 billion apps have been downloaded from the Play Store and at least that part of the business seems to be doing well.

Google also tried to talk up its non-ad business, which is growing rapidly. Page also mentioned the Moto X, Motorola’s elusive new Google phone which is still vapourware. He told reporters and analysts that they will have a chance to try it out “pretty soon.”

Peter Scott

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