Seeking Alpha

Google's paid clicks keep surging; ad prices remain under pressure

  • Google's (GOOG) paid click growth, boosted by mobile searches and product listing ads (PLAs), continued to accelerate in Q4. Paid clicks rose 31% Y/Y after growing 26% in Q3 and 23% in Q2.
  • At the same time, mobile continues taking a toll on ad prices: cost per click fell 2% Q/Q and 11% Y/Y after dropping 8% Y/Y in Q3 and 6% in Q2.
  • Google Sites revenue (67% of revenue exc. Motorola) rose 22% Y/Y, the same as Q3. Ad network revenue (23% of total), pressured lately by policy changes meant to improve the user experience, rose 3% vs. 1% in Q3. Other Google revenue (10% of total - Nexus, search appliances) rose 99% vs. 85%.
  • Opex was 33% of revenue, even with a year ago. A hefty $2.26B was spent on capex. Free cash flow was $2.98B, less than net income of $4.1B.
  • International sales made up 56% of revenue, flat Q/Q and up from 54% a year ago. Traffic acquisition costs were 24% of revenue, even with Q3 and down from 25% a year ago.
  • Ahead of the Lenovo deal, Motorola Mobility had Q4 revenue of $1.24B (-18% Y/Y), and an op. loss of $384M.
  • Google ended Q4 with $58.7B in cash/investments (much of it offshore), and $5.5B in debt.
  • Investors take the numbers in stride, GOOG +0.1% AH. CC getting started.
  • Q4 results, PR, slides
Comments (6)
  • mostserene1
    , contributor
    Comments (3330) | Send Message
     
    Long GOOG. Investors generally give google a pass when they miss estimates, unlike Apple, which they hammer even if it beats estimates.
    30 Jan, 04:39 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (698) | Send Message
     
    "Ahead of the Lenovo deal, Motorola Mobility had Q4 revenue of $1.24B (-18% Y/Y), and an op. loss of $384M."

     

    Wow - Google's made some great deals in the past, by Motorola was a real bust...
    30 Jan, 04:44 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (698) | Send Message
     
    *but
    30 Jan, 05:40 PM Reply Like
  • mike_l_a
    , contributor
    Comments (5) | Send Message
     
    Those CPCs just don't stop falling. For the moment they can compensate by increasing volume, but what happens once they've completely spammed all of their products chock-full of ads?
    30 Jan, 07:33 PM Reply Like
  • sl100
    , contributor
    Comments (110) | Send Message
     
    They missed rev and earning but the manipulator took it up in after hours.
    -- Insiders are selling like crazy.
    -- 40-50% of clicks on goog are unintentional or bots doing this google is aware of it. They fake it by taking action on very few. That is the reason the advertisers and lowering the price.
    -- Going forward things do not look good in terms of revs and profits. They have not accounted for losses in Motorola sale, patent infringement, no sure hiw many of the companies they is going to lose more money.
    -- PE for goog is now 34 and mkt by tomorrow will be 400Billion.
    -- people are getting away from desktops this should slow future rev/profit growth. Mobile growth is slow and has competition.
    -- people are buying this because of the split meaning mom and pop are getting sucked in now.
    -- fidelity is the largest owner of the stock and is in 2 main funds contra and growth funds and these funds that are pushing the stock up
    -- it's a popular name but the mkt cap is so big that making money on this going to difficult.
    30 Jan, 07:46 PM Reply Like
  • DanoX
    , contributor
    Comments (2633) | Send Message
     
    Lackluster numbers again, but they (Google) are brilliant at playing the Wall Street game.
    31 Jan, 02:21 AM Reply Like
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