Google Shares Rise Despite Decreasing Average Cost Per Click

In a recent earnings call, despite a drop in the average cost per click for advertising on the Google network, the search engine giant has prevailed and shown good results.  Analysts stated this was mainly due to adding a new product listings search feature at the end of 2012 and reaching more international markets.

In stock news, the reported net revenue was up from $8.13 billion to $9.83 billion a year later.  A poll taken among Reuters analysts had under predicted the forecast at around $9.6 billion.

Business from international markets was reported to have risen 23% in one year whereas the growth in the 3rd quarter was only 15%.

One of the key performance indicators to measure Google’s performance and plays a big part in the valuation of the stock is the average cost-per-click.  Despite an increase from the 3rd quarter the average CPC had fallen 6% from the previous year.

The fall in the CPC was mainly due to the increase of consumer using mobile smartphones.  Advertising for smartphones using Google’s advertising platform provides advertisers with lower rates than on the web based ad network.  This also shows that advertising money is beginning to shift to mobile advertising.  It is still difficult and too early to measure the effectiveness of mobile advertising on the Google mobile network.

Last year saw Google acquire Motorola Mobility.  This was the foundation of Google’s move into mobile waters.  However, Motorola Mobility reported yet another quarterly loss.

In a recent interview, Google CEO, Larry Page stated “We now live in a multi-screen world, we feel naked without our smartphone.”  Despite the non-profitable Motorola Mobility, Google is continuing to focus on mobile smartphones.

The reported net income, in other stock news, for the fourth quarter was $2.89 billion which translated to $8.62 per share.  The figures for last year were $2.71 billion and $8.22 per share before the Motorola acquisition.

Despite mobile click prices making the average CPC decline and adding pressure on the share matrices, it is thought to be only a matter of time that the mobile CPC prices will rise in-line with a higher demand for mobile advertising space.

The operating loss reported for Motorola Mobility during the quarter was $353 million.

Patrick Pichette, CFO of Google predicted more turbulence with Motorola’s financial results in 2013 while efforts are made to restructure Motorola.

Google also announced a plan to off-load the Motorola Home television set top box business to Arris Group Inc.  The price of the deal is set at $2.35 billion. Additional development will focus on a smaller range of products for the mobile phone industry.

Google share were on the up around 5% to $738.20 in Tuesday’s after-hours trading.

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