Google revenue increases despite Wall Street concerns

Posted on July 28, 2012


Despite concerns from Wall Street, Google revenues have increased during the second quarter of the year. Wall Street had expressed concern of the negative effects that the weak economy and the move to the mobile market, which is less profitable, may have. The performance of Google’s main ads business was much stronger than predicted, despite concerns.

Google shares displayed an increase of 2.1 percent during the day and a further 3.2 percent after trading. The figures were the first to be released since Google purchased Motorola Mobility earlier in the year. During its brief ownership of Motorola, it lost $233 million which prompted questions from analysts at Wall Street who wanted to know how Google would reverse this trend. The chief financial officer, Patrick Pichette said that the reported losses didn’t give an accurate picture as adjustments had been in relation to the acquisition. Although there had been concerns of Motorola’s handset business, focus was concentrated on the success of Google search and considerable growth of its ads business and YouTube.

During the quarter, the number of clicks on ads which are paid increased by 42 percent in comparison with the previous year. However, the profit from each click has reduced by 16 percent due to the impact of changes in foreign currency and the lower cost of mobile advertising.

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