SAN FRANCISCO — With Google’s business under pressure from mobile advertising prices, CEO Larry Page talked up the potential for none other than the Internet giant’s mobile businesses.
Google on Thursday missed Wall Street’s expectations for both profit and revenue, sending shares 5% lower in after hours. Concerns continue about so-called cost-per-click prices that advertisers pay Google for Internet-search advertising.
That didn’t stop the soft-spoken Page, who in May disclosed vocal chord paralysis issues, from touting the promise of Google’s mobile strategy and teasing interest in a coming next-generation of mobile products.
“There’s so much excitement around new devices today, and the potential for innovation is tremendous,” Page said on a conference call with analysts, investors and members of the media. “I know you are all eagerly anticipating what Motorola is launching soon.”
Google purchased Motorola Mobility in a $12.4 billion deal last year and has captured the attention of Silicon Valley watchers awaiting the debut of its Moto X phone. A rare U.S.-made device, Google’s Moto X aims to compete with Apple’s iPhone and Samsung’s Galaxy lineup.
Google’s average cost-per-click, which includes clicks related to ads served on Google sites and the sites of its network members, decreased about 6% in the quarter compared with a year ago. Analysts had predicted prices would drop about 3% in the period.
Enormous popularity for mobile computing devices has radically shifted the Internet business landscape in recent years. Companies such as Facebook, Microsoft and Zynga have sounded the alarm in shifting to a mobile focus to meet the rising demands from consumers. Microsoft has mostly missed the mobile bandwagon with low uptake for products running its operating system, while Zynga’s CEO has stepped aside amid revenue declines.
“It’s hard to fault them (Google), because everyone is still searching for their mobile business model. I think we’ve figured out that merely transplanting the desktop model to the mobile business is not working,” said independent analyst Jonathan Yarmis.
Google reported second-quarter net income of $3.23 billion compared with $2.79 billion a year ago. Revenue in the quarter rose 19% to $14.1 billion.
Analysts were expecting Google to report net income of $3.6 billion on $14.41 billion in revenue for the quarter, according to the survey of estimates from Thomson Reuters.
source: USA today