Advertising helps Google post 22 pc jump in Q2 revenue [Big News Network (United Arab Emirates)]
(Big News Network (United Arab Emirates) Via Acquire Media NewsEdge)
WASHINGTON - Internet giant Google has reported a strong 22% jump in revenue to $16 billion during the second quarter period from March through June compared to a year earlier, driven by an increase in the number of paid clicks on ads.
In its earnings report, the company stated that its profits were up 6% to $3.4 billion, and earnings per share (EPS) in the second quarter of 2014 at $6.08, compared well to $4.96 in the second quarter of 2013.
Of Google's total revenues $9.3 billion, or 58 percent, came from outside the US. Capital expenditures of $2.65 billion and operating expenses of $5.6 billion, up from $4.5 billion year-on-year, kept Google's second-quarter EPS slightly lower than analysts' expectations of $6.25.
Google also announced chief business officer Nikesh Arora was leaving after 10 years for SoftBank, a Japanese telecommunications and Internet giant, as vice chairman
Arora will be temporarily replaced by Omid Kordestani, who was Google's business founder and was formerly Google's senior vice president of global sales until 2009, and has since been a special advisor to the founders.
Google attributed its growth to its advertising, which helped to boost revenues above expectations.
During an earnings call, Google chief financial officer Patrick Pichette steered talk away from Aurora's career move to state, "We are moving forward with great product momentum and are excited to continue providing amazing user experiences, with a view to the long term."
Google shares rose about 1 percent to $579 in after-market trading after the release of the earnings report.
Google said a key factor in revenue was the jump in "paid clicks," for ads related to searches on Google and its partner sites. Total paid clicks were up 25 percent from one year ago and 2 percent from the past quarter, while the average cost per click was down 6 percent from a year earlier.
Google had a 31.9 percent share of the global market in digital advertising last year, according to the research firm eMarketer. The closest rival was Facebook with 5.8 percent.
According to eMarketer, Google has more than 50 percent of the worldwide mobile advertising market.
Pichette told analysts that it has been diversifying into other areas such as home automation, self-driving cars and wearable technology such as smartwatches and Internet-linked eyewear, with the release of Google Glass in April.
Google takes a venture capitalist approach to new projects, calling on teams to hit milestones and make their cases when it comes to being funded, stated Pichette.
Heavy investment in new technologies and infrastructure such as data centers moderated short-run earnings. But analysts say the company's diverse portfolio of technology investments anchors its long-term strength.
"It was yet another okay quarter for Google," said Gartner analyst Brian Blau. "I am encouraged by Google's approach to engineering, and how they enable products by building cool tech. They try to keep their users happy."
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