Last week, Google’s shares fell in late trading after the Internet giant missed earnings expectations. Google reported its third-quarter profit slipped to $2.81 billion, or $4.09 a share, from $2.97 billion, or $4.38 a share, a year ago.
On an adjusted basis, Google earned $6.35 a share, falling short of $6.54 a share forecast by analysts in a FactSet survey. Revenue rose to $16.52 billion from $13.75 billion in the year-earlier period. This led to some disappointment, as the company was posed to reach $16.58 billion.
There are some worrying about Google’s growth, as the amount the internet company makes per ad click is decreasing, even as the number of clicks the company drives increases WSJ reports.
As a company, Google sees that it needs to get paid more for the ads they sell, and according to Ad Age reports, that hasn’t happened in three years. However, that new focus is something that Adam Epstein, President and COO of adMarketplace, feels is shortsighted for the company, as publishers and advertisers are constantly looking for improved ROI.
“The search industry is in transition and Google’s Q3 earnings illustrate this: The company is doubling down on its core search properties to meet their revenue goals,” said Epstein. “It is charging advertisers for clicks that used to be free, raising US desktop CPCs, and paying publishers an ever-shrinking percentage of revenue. This may help Google in the short-term, but it is also compelling advertisers and publishers to look for new options with better ROI and yield.”
During its earnings call, Google also noted that YouTube has a bright future with the company. While continuing its campaign to promote its biggest content creators, it’s unclear just how effective the marketing has been for the video site.
YouTube’s revenue data is still kept close to its chest, though they were excited to share that the site has 400 hours of content that are uploaded every minute and partner revenue is up 60% from 2012 to 2013.
Though it wasn’t all numbers and data, as Patrick Pichette, Google’s Senior Vice President and CFO, was excited to share that Omid Kordestani, who took over temporarily three months ago from departing Chief Business Officer Nikesh Arora, announced that he would be sitting in the role permanently.
“All of us at Google couldn’t be happier to see Omid at his post running our business organization once again,” said Pichette.
“I am thrilled to be back at Google leading our global business again,” Kordestani followed. “We continue to have the same boundless energy and endless curiosity we’ve always had as a company and we are as focused as ever in our mission of making information useful and accessible to everyone.”
As a need for change wafts through the air at Google, it’s hopeful that the company’s “boundless energy” can allow it to avoid another quarter of missed earnings.