Tags: Google | Profit | Mobile-Ad | Tools

Google Profit Tops Estimates on New Mobile-Ad Tools

Thursday, 18 Apr 2013 05:29 PM

Google Inc., owner of the world’s most popular search engine, reported profit that topped analysts’ estimates as advertisers increased spending on mobile and video promotions.

First-quarter profit, excluding some items, was $11.58 a share, Google said in a statement Thursday. Analysts had projected $10.68 per share, according to data compiled by Bloomberg. Net income increased 16 percent to $3.35 billion, or $9.94 a share.

Google is pushing beyond its roots as a desktop-based search business to enter new markets, including smartphones, Web services and video, stepping up competition with Apple Inc. and Microsoft Corp. At least 15 percent of advertising revenue comes from mobile and the YouTube video-sharing service, up from about 5 percent two years ago, according to Martin Pyykkonen, an analyst at Wedge Partners Corp.

“You’re seeing good progress,” Pyykkonen said. “They’re taking advantage of, and really cultivating these relatively newer businesses.”

First-quarter revenue, excluding sales passed on to partner sites, rose to $11 billion, Google. Analysts had projected sales of $11.2 billion, according to data compiled by Bloomberg.

Shares of Mountain View, California-based Google rose 1.3 percent to $776.01 in aftermarket trading. During the regular session, the shares slipped 2.1 percent to $765.91 at the close in New York. The stock has advanced 8.3 percent this year, compared with an 8.1 percent gain for the Standard & Poor’s 500 Index.

Paid Clicks

The average amount advertisers paid each time a user clicks on a promotion decreased 4 percent, following a 6 percent decline in the previous three-month period. The total number of clicks advanced 20 percent, after a 24 percent gain in the fourth quarter. Analysts had predicted the cost per click would fall 2 percent, while the overall number would climb 20 percent, according to data compiled by Bloomberg.

Rates for mobile ads can be about 52 percent less than for promotions on desktop machines, according to Covario Inc., an online marketing agency.

Google is counting on mobile advertising to bolster growth. In February, Google upgraded its online advertising service to make it easier for marketers to reach users on different devices, including smartphones and tablets. The revamped AdWords service will also help companies manage bids for ads running at different locations and times,

The new push in mobile also includes the $12.4 billion acquisition of Motorola Mobility, which makes handsets using Google’s Android software.

Google has made other investments outside its core search- based online advertising business. In February Google said it would expand its laptop line, called Chromebook, to include a higher-end touchscreen version that cost at least $1,299 and up. Earlier this month, the company unveiled plans for broadband and television service in Austin, Texas, and Provo, Utah, after starting a similar program in Kansas City last year.

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Google Inc., owner of the world s most popular search engine, reported profit that topped analysts' estimates as advertisers increased spending on mobile and video promotions.
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2013-29-18
Thursday, 18 Apr 2013 05:29 PM
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