Google grows, but disappoints in mobile advertising

Google surprised investors on Thursday, 18, after the results of its second quarter of the year, which ended on June 30. The numbers came slightly below expectations, which caused the company’s shares to fall by almost 5% at the beginning of after-market negotiations.

The search giant reported earnings of $ 9.56 per share (total of $ 3.2 billion), up 16% over the same period last year. The company’s revenue grew 19%, reaching US $ 14 billion. The market expectation was that the company’s revenue would reach US $ 14.4 billion.

The big disappointment in the market, however, was the drop in mobile advertising prices. The ‘cost-per-click’ (CPC), or, the price that advertisers pay each time someone clicks on an ad within the search engine, fell 6% compared to 2012. In the quarterly comparison there was a fall of 4%. Analysts’ forecast was more optimistic: a drop of only 3% in the CPC.

The value of advertisements on mobile devices has been falling since the fourth quarter of 2011. Analysts attribute the drop to the fact that the price of displaying advertisements on smartphones and tablets is lower than on desktops.

The company’s CEO, Larry Page, however, says that mobility will not harm the company’s business. In the company’s official announcement, the executive said that “mobility creates a huge opportunity for Google. With more equipment, more information and more online activities, the potential to improve people’s lives only increases”.

Motorola

Motorola, acquired in May 2012 by Google, continues to report losses, according to the report. The manufacturer lost $ 342 million, against $ 272 million in the last quarter.

According to sources, despite the losses, Google continues to invest in the company. Sources in the Wall Street Journal say the web giant plans to spend about $ 500 million on Motorola’s new flagship, the Moto X smartphone, due to be launched later this year. In addition, the search engine will invest in a range of new devices produced by the partner.

Motorola’s loss, among other factors, contributes to a lower profit than expected by Google. Analysts had expected earnings of $ 10.80 per share.

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