Google earns more but suffers from falling price per ad

Google has served more ads and made more money in the past three months. At the same time, however, the search giant earns less money per ad, because ads on mobiles and tablets bring in less money.

From the beginning of January to the end of March, Google took in $15.4 billion, or €11.1 billion, in the quarter. That is almost a fifth more than a year ago. This increase is partly due to a growth in the number of clicks on Google advertisements: that number increased by 26 percent. At the same time, however, the price Google gets per click decreased by 9 percent. This is mainly because companies pay Google less for mobile ads.

However, in a conference call with analysts, the transcript of which Seeking Alpha published, Google’s chief business officer Nikesh Arora says he’s not worried. “In the medium to long term, mobile ad prices will be higher than desktop ad,” Arora said. According to him, this is partly because the location of the user will count and ad networks on mobile devices know more about users.

Despite selling its own Nexus smartphones, the Chromecast, and revenue from the Play Store, Google still derives the vast majority of its revenue from advertising. In total, that is 90 percent, or 13.9 billion dollars. The vast majority, over $10 billion, is earned by Google through its own websites; the rest comes in through advertisements on third-party websites. Google earned a total of $1.6 billion from ‘other’ activities.

Google achieved a net profit of $3.45 billion, or 2.5 billion euros, a slight increase from a year earlier. Profits rose despite increased spending, for example on data centers. Google also had to invest $ 198 million in the past quarter on its Motorola phone division, which the search giant plans to sell to Lenovo in the near future.