Menu
Google reports strong earnings, propelling its stock

Google reports strong earnings, propelling its stock

Growth in the company's revenue, however, has slowed in recent years

Inside Google's headquarters in Mountain View, California.

Inside Google's headquarters in Mountain View, California.

Google's stock jumped more than 7 percent in the after-market hours on Thursday, after the company reported strong earnings results for the second quarter.

Total income for the period ended June 30 was $US3.93 billion, up 17 per cent from $US3.35 billion in the second quarter of 2014, Google announced Thursday. Excluding certain expenses, Google reported earnings of $US6.99, beating analysts' estimates of $US6.71, as polled by the Thomson Financial Network.

The company's stock was trading at around $US620 after Google reported its earnings at the end of trading, up from closing at $US579.

Still, Google's growth has been slowing.

Advances in the Internet giant's crucial advertising sales have taken a hit the last few quarters. Revenue is still growing, but at a slower rate than in years past, as the company has made new investments in ambitious "moon shot" projects like self-driving cars and Internet balloons in the stratosphere.

The company's sales for the second quarter were $US17.73 billion, up 11 per cent, and coming in just shy of analysts' estimates of $US17.75 billion.

But the 11 per cent growth rate is the smallest revenue increase reported by the company since 2012.

The company reported mixed results in its ads business. Its paid clicks grew by 18 per cent, but the cost-per-click paid by advertisers fell by 11 per cent.

The company's operating expenses, meanwhile, grew by 13 per cent, to $US6.32 billion.

One concern among investors is that Google is struggling to grow its ad revenue on mobile devices. In comparison to the desktop, ads in mobile search results are smaller, and can yield fewer interactions from users, driving down their price.

Google has tried to attract more users to its ads on mobile by adding more information and functionality to them, like product ratings and store inventory information. Just this week, the company said it was rolling out a new way to let users make purchases directly from the ads in mobile search results.

Google is also competing with a rising number of apps made by other developers built around specific types of searches or online activities. In April, Google made a change to its search algorithm that prioritized sites that had been optimised for mobile. By prioritising higher quality sites, the effect, dubbed "Mobilegeddon," was aimed at getting more people to use Google search on mobile.

Google doesn't break out it's desktop versus mobile advertising sales. But Google might be making new strides in mobile. In its announcement , CFO Ruth Porat said mobile "stood out" in the context of the company's core search results.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags business issuesadvertisingGooglefinancial resultsmobileinternetsearch engines

Slideshows

Top 50 defining moments of the New Zealand channel in 2016

Top 50 defining moments of the New Zealand channel in 2016

Reseller News looks back on a tumultuous 12 months for the New Zealand channel, assessing the fallout from a year of sizeable industry change. Whether it be local or global mergers and acquisitions, distribution deals or job changes, the channel that started the year differs somewhat to the one set to finish it - Reseller News assesses the key moments that made 2016.​

Top 50 defining moments of the New Zealand channel in 2016
​Hewlett Packard Enterprise honours high achieving NZ channel

​Hewlett Packard Enterprise honours high achieving NZ channel

Hewlett Packard Enterprise honoured its top performing Kiwi partners at the second running of its HPE Partner Awards in New Zealand, held at a glitzy ceremony in Auckland. Recognising excellence across eight categories - from distributors to resellers - the tech giant celebrated its first year as a standalone company, following its official split from HP in 2015.

​Hewlett Packard Enterprise honours high achieving NZ channel
Nutanix treats channel partners to Christmas cruise

Nutanix treats channel partners to Christmas cruise

Nutanix recently took to the seas for a Christmas Cruise around Sydney Harbour with its Australia and New Zealand staff, customers and partners to celebrate a stellar year for the vendor. With the sun out, they were all smiles and mingled over drinks and food.

Nutanix treats channel partners to Christmas cruise
Show Comments