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Google's Earnings Disappoint - chairman - 07-18-2013
Today, Google reported second-quarter earnings that fell short of analysts’ estimates. You can read about the details here, but the takeaway is basically that Google is part of an elite club of otherwise-wildy successful companies (Facebook, Yahoo, Twitter) with highly capable, well educated employees who can’t seem to get a handle on mobile advertising for love or money.
The figure that really got people twitchy was Google’s cost-per-click (CPC) rate, which fell 6 percent. CPC rates are an indication of how much an advertiser pays Google every time a user clicks on an ad on one of Google’s sites. Mobile has been driving those rates down: an ad served up from a mobile search can cost 40 percent less than one coming from a desktop PC, according to digital-marketing firm Covario. Today’s report from Google shows that trend continuing. For the first quarter of 2013, the CPC drop was 4 percent; analysts had been expecting a smaller, 3 percent drop for this quarter, not a larger one. The stock’s price dropped more than 5 percent in after hours trading.