Getty / Justin Sullivan
Google earnings are out!
It's a miss on the bottom line, but a beat on the top line:
- Non-GAAP EPS: $6.08 versus $6.25 expected
- Revenue ex-TAC: $12.67 billion versus $12.32 billion expected
- Gross revenue was $15.96 billion, which is up 22%, versus expectations of $15.61 billion
Google also announced that long time sales boss Nikesh Arora is leaving the company, going to Softbank where he will be a vice chairman and CEO of its Internet and Media division. Omid Kordestani will take Arora's place.
The stock is up modestly after-hours.
The most important thing investors were watching was paid clicks and cost per click:
Paid clicks increased approximately 25% over the second quarter o f 2013 and increased approximately 2% over the first quarter of 2014. Cost per click, CPC, was down 6% from the previous year. However, that's a modest increase over the first quarter of the year, when CPC was down by 9% year-over-year. It remained constant from the first quarter of 2014.
The numbers show that even as mobile ads become a larger part of its business, Google still can't charge as much for them as it can for desktop ads. In the earnings call, though, Nikesh Arora said that there's "huge revenue opportunity" for mobile, and Google expects that mobile ads will eventually be more lucrative than desktop.
Here's a look at the change in Google's CPC over the last few years, from Business Insider Intelligence:
Here's a nice chart from from Jan Dawson:
Here are those new metrics from Google: clicks on Google’s own websites growing nicely, prices down all over pic.twitter.com/qFkjNJWVq7
— Jan Dawson (@jandawson) July 17, 2014
And here's Google revenue:
Google made a few acquisitions this year, including Titan Aerospace, a drone company, and Skybox Imaging, a satellite service. These acquisitions (and the hundreds of millions of dollars that they required) will be helpful for Google's "moonshot" type projects, and on the call, an investor asked about Google's timelines for profitability for these various initiatives. The company's ceded that these are long-term projects, and although it's constantly updating its theses about profitabilty, these are multi-year commitments that could take decades.
Nikesh Arora is speaking on the call, after the news that he'll be leaving the company to join SoftBank.
He calls out successful channels like, Epic Rap Battles of History, for increasing interest in YouTube.
He highlights Google MyBusiness, Google's initiative to help small business manage their web presences.
I can report that over 60% of over Fortune 500 companies use Google enterprise products, he says. 1 million Chromebooks were sold into schools. Chromecast is becoming more popular, particularly overseas.
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