Google was dinged the last two quarters for not living up to Wall Street expectations but in this Q2 earnings announcement, the Mountain View firm has made significant strides in rectifying the reputation of consistent financial growth. It reported a revenue of $17.7 billion this past quarter, which is an 11 percent growth year over year and a 3 percent growth since Q1. This has caused its stock to climb by 11 percent at closing. What’s contributing to the Google financial growth? As CFO Ruth Porat puts it, thanks to mobile and YouTube.
Porat said that “the gap between mobile and desktop continues to narrow” when it comes to the money it makes from advertising. There’s apparently been a particularly strong surge in mobile search, which is a significant contributor to ad revenue. Chief Business Officer Omid Kordestani said on the earnings call that “more searches happen on mobile than computers in 10 countries.” He says that around 30 percent of mobile searches are location-related — perhaps they want to know what’s around them or where’s the closest gas station. “When people search on mobile, they want immediacy and action,” he said.
Google has also invested in other key mobile experiences, especially in a world where people are less likely to head directly to google.com to search. Kordestani states that efforts like Google Photos, Now On Tap and Android Pay all factor in to making Google’s mobile presence more widespread. He also credited deep linking — where users are led to install new apps from links within other apps — for a boost in traffic. What’s particularly impressive is that YouTube ad revenue has also blossomed, particularly in mobile. The “Trueview” ad format — basically all those pre-roll ads you see before YouTube clips — has really grown of late. A new feature of Trueview that automatically adds product information and pricing in video ads is cited for the growth. Indeed, the number of advertisers running ads on YouTube has gone up by 40 percent and the average spend is up by 60 percent. Kordestani said that the average viewing time on YouTube is also more than 40 minutes. More 18 to 49 year olds watch YouTube on mobile than any cable network.
Google’s other projects like Nest, Fiber and Google Life Sciences are now under “tighter governance” and they’re not quite making money yet but the potential is there…..
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