Google’s Second Quarter Earnings 2013 Show Problems With Mobile – Some Reasons Why
On July 18, Google reported second-quarter earnings and again on they were lower than analysts expectations due to lower cost per clicks (CPCs) that fell short of analysts’ estimates. Google, unlike Facebook is still having a hard time monetizing mobile and the CPC rate, dropped 6 percent which has happened several quarters in a row.
CPC rates measure general advertiser sentiment and have been going down as Google gets more clicks from mobile.
The problem for Google is that ads on the mobile platform generate about 40 percent less revenue and volume on these devices hasn’t made up the difference yet.
Facebook has been expanding their mobile presence and is making headway in the space, so why can’t Google?
It could be the results the search engine are showing, or the competition from Facebook where people are getting more news from daily, although there are some questions about teenage engagement and growth.
Google has a large opportunity to monetize mobile but it won’t be easy to make up the 40 percent from the desktop lost in CPC click value. Facebook has a unique opportunity to monetize mobile based on the valuable information it has obtained from its user base over the years. This means ads on mobile devices can be more targeted that those served on the Google platform even though Android continues to be a hit with consumers. Watch the Google and Facebook monetizing mobile story and keep watching what Wall Street thinks, over the long run, investors get it right. Traders may be taking profits elsewhere and piling them into Facebook.
In Facebook’s last quarter it received 41% of revenue came from mobile devices which was an increase from 30% in the prior quarter and up 23% from two quarters ago when questions about mobile loomed large.