6 ms·

Google Reports Better-Than-Seen Revenue Growth

99 points by reflect 12y ago

deleted 12y ago
[deleted]
- twrkit 12y ago
  > They need to diversify their sources of revenue more. Self-driving cars, robotics, Nest, Fiber, contact lenses, ... ?
  - darkstar999 12y ago
    The key word being "revenue". Google is very dependent on their ad revenue right now. (the parent comment is deleted, so I'm only responding to you)
    - justicezyx 12y ago
      OK, tell me, for a company as large as google, how can I create a revenue source, in 1 year; in such a way that, you never view it as non-revenue generating, but immediately create revenue... Please, let me know, I will be the greatest CEO of all time... If I manage to convince any company that this will work...
      - JetSpiegel 12y ago
        "We are closing Google Reader Free, but you can pay $1 a month!"
        justicezyx 12y ago
        How to do down vote? I want to down vote your post...
        zaroth 12y ago
        Hmm... That's an interesting way of saying, "Thank you for providing such a great example!"
        JetSpiegel 12y ago
        No need, you are the greatest CEO of all time. At least better then the ones at Google.
  - dzhiurgis 12y ago
    Cardboard helmets
- tabakd 12y ago
  I feel there's a bit of irony in your two statements.
- fidotron 12y ago
  Most ironic comment ever? Google may need to diversify, but that seems unlikely in a world where you expect all content to be free.
rubiquity 12y ago
If you come to this link about Google from Google.com by searching "Google Reports 22% Revenue Growth" you can skip the pay wall. https://www.google.ca/search?q=google+reports+22%25+revenue+growth https://www.google.ca/search?q=google+reports+22%25+revenue+...
- nbody 12y ago
  Thank you. F@$!#% paywalls
IBM 12y ago
I've lost track of how many quarters in a row CPC has declined. I think it's 12 or 13 now.
- Hermel 12y ago
  Do you happen to know the reason? Are more ads being served in countries with lower prices? Or is it due to competition?
  - itry 12y ago
    My guess is that the clicks are worth less these days for two reasons: 1) The ads are now displayed so prominently that everybody has to notice them. Earlier, they where less prominent and more clearly marked as ads. So there is probably a shift in demographics. Less dedicated buyers and more people who just stumble upon the ad. 2) On tablets and phones people might a) misclick more and b) surf more without the intend to buy.
    - CaveTech 12y ago
      I'm unsure if misclicks/clicks without intent would drive down the cost of CPC. In the short term, they'd definitely drive up the price. It's possible that lower conversion rates after the click would lead people to put in smaller bids, but I'd say thats unlikely. There's no shortage of people willing to buy ad space with high click throughs.
  - CaveTech 12y ago
    Probably due to a lot of factors, but the biggest one is likely ad blindness - People just don't notice Ads anymore. It's especially prevalent in kids but it's probably also taking ground with adults now too.
    - wutbrodo 12y ago
      This would have nothing to do with the effect shown. Paid clicks (i.e. the number of actual clicks on ads) have been growing rapidly over the same time period. Dropping CPCs are pretty obviously a result of the mix shifting to mobile (particularly since both mobile and desktop CPCs are rising).
smackfu 12y ago
Fancy, Google's stock box now has after hours charting. https://www.google.com/search?q=goog https://www.google.com/search?q=goog
- alanpca 12y ago
  https://www.google.com/search?q=goog#nfpr=1&q=googl https://www.google.com/search?q=goog#nfpr=1&q=googl
jcampbell1 12y ago
It would be interesting to know how much removing the background color from the Adwords ads above the organic results effected profits. I find myself clicking adwords ads frequently since the change. They practically look identical. I imagine it was a nice boost to revenue.
- VikingCoder 12y ago
  What are you talking about? Do you not see the giant, golden "Ad" next to each ad?
  - yabatopia 12y ago
    It happens to me too now and then and I'm pretty sure that we're not the only ones. The Ad icon I see is far from gigantic and more blueish than gold, it's very easy not to notice you're clicking on an advertisement. Maybe15 years of using Google and relying on the first search results on top has caused some sneaky "Ad" blindness. Sometimes I feel sorry for the advertiser when I accidentally click such sneaky text Ad, especially when the first real, natural search result is the link to the advertising company's website, just below the Ad. It feels like a devious way to rip off advertisers who would have been first anyway.
    - shkkmo 12y ago
      Yeah, given the number of times that I have used google to pull up a website, and the company also had the top add makes it seems like they are paying for what they already get. However, they are also blocking a competitor from placing an ad there and potentially siphoning off traffic.
    - wirelessest 12y ago
      As an advertiser, ads when you're the first result aren't a rip off. At that point you're not paying for the ad, you're paying so someone else doesn't get the ad over your results.
davis_m 12y ago
Direct link to the filing if you are interested: http://www.sec.gov/Archives/edgar/data/1288776/000128877614000058/googq22014exhibit991.htm http://www.sec.gov/Archives/edgar/data/1288776/0001288776140...
ChuckMcM 12y ago
Continued erosion of the CPC number (down 2% Q2Q, 6% y/y) so for those who haven't been following this like I have here are the last fourteen quarters: Paid Clicks Cost Per Click Paid Distribution Q-2-Q Y-A-Q Q-2-Q Y-A-Q In $M 2011Q1 18 4 8 -1 337 2011Q2 18 -2 6 12 355 2011Q3 13 28 -5 5 383 2011Q4 17 34 -8 -8 442 2012Q1 7 39 -6 -12 468 2012Q2 1 42 1 -16 507 2012Q3 6 33 -3 -15 556 2012Q4 9 24 -2 -6 634 2013Q1 3 20 -4 -4 680 2013Q2 4 23 -2 -6 706 2013Q3 8 26 -4 -8 755 2013Q4 13 31 -2 -11 824 2014Q1 1 26 0 -9 845 2014Q2 2 25 -2 -6 893 Cost per click is the money that Google gets per click, it keeps going down suggesting to me that the "value" of this advertising is going down. Paid Clicks are clicks on Google ads which are up impressively but my observation is that there are a lot more of them in places than before. And lastly Google is paying nearly $900M/quarter (that is a 3.6B% annual run rate) to "buy" traffic to their properties. From that I conclude that Google's "specialness" is losing its luster, and that results from other services are "good enough". Doing this same math on Bing results and you will see that Microsoft is capturing the lion share of the value that Google is losing here. (and while Blekko is a search engine, we figured out earlier that you couldn't buy traffic against a competitor willing to spend billions a quarter) The other observation is that this realistically, this can't go on. Eventually Bing will be getting equal CPC with Google, and at that point trying to buy traffic or force the use of a particular browser that will only go to one search engine reliably, will make you less competitive than the more efficient guy down the street. I can't wait :-)
- jedc 12y ago
  But CPC erosion is more likely due to higher % of searches from mobile devices. As Google's ads team works furiously to improve mobile ads, this will likely only go up. (Except that right now growth in the sheer number of mobile ads is outpacing the growth in monetization of those ads.)
  - ChuckMcM 12y ago
    As I mentioned above, they have CPC erosion in both their AdMob numbers and their Sites numbers. This statement though I've heard a couple of times: > (Except that right now growth in the sheer number of > mobile ads is outpacing the growth in monetization > of those ads.) I don't think I understand it. I get that more and more ads are being shown (growth in sheer number) but this part I don't get (outpacing ... monetization). So Google is throwing more and more ads out there, and at some point they are going to discover how to make them more valuable to advertisers so that the advertisers will pay more for them? I get that this isn't like a commodity good which is racing toward zero margin, but I don't see mobile ads getting more valuable. I characterize what we do at Blekko as 'utility search', which is what a lot of mobile users seem to need. When they search on their mobile for a restaurant name you can give them "perfect" search results by returning, the home pages of the restaurant, a onebox with hours/phone/address, a link to a review site, and an advertisement for a coupon at that restaurant or a competitor in the same food pallete. Google gets that, its pretty much the formula they use, but it isn't special because pretty much a solid businesses database, set of navigation links, and an ad feed for restaurants is all you need to serve that up. And other people are willing to give the phone provider a bigger cut of the ad revenue. That is why I'm having a hard time imagining a way that Google is going to pull higher CPCs here. It feels very commodity to me and that is a margin game. As a margin game that 32% net margin which is funding free food, self driving cars, and moonshots comes under pressure.
programminggeek 12y ago
More clicks, less value. Seems like mobile is driving down the CPC.
sscalia 12y ago
"Google has become 22% better at selling its users habits and personal information to advertisers"
- JetSpiegel 12y ago
  http://tvtropes.org/pmwiki/pmwiki.php/Main/TwentyPercentMoreAwesome http://tvtropes.org/pmwiki/pmwiki.php/Main/TwentyPercentMore...
- skj 12y ago
  Starting off with an admission that I'm a Google fanboy and employee... I hate this sentiment. It's silly. Google does not sell any information to anyone. Google just shows people targeted ads. If you can show a way to infer personal details from the mere fact that someone is shown a particular ad (or particular huge set of ads), then publish your results so Google can figure out how to not leak that information.
  - duncanawoods 12y ago
    There is only a subtle distinction between selling an information service like targeting and selling the underlying information. Consider, a mobile phone network that sold drone strikes on its users using the privileged information they have on their location. The precise flow of money and information is not that important to the consequence for the end user. Google targeting is "using information about me to benefit another company for financial gain of Google". It is not silly to call this selling...
    - skj 12y ago
      Firstly, comparing ad views to drone strikes is absurd in any context, and the only purpose can be some terrible appeal to emotion. Even if we were to go with this analogy, the person purchasing the drone strike still doesn't have the privileged information. So, even in this absurd world, no information was sold. The fact that it's terrible for the user (almost as bad as seeing an ad on a site in exchange for that site costing no money!) is irrelevant. Secondly, > It is not silly to call this selling... yes it is! When you sell X to someone, at the end of the transaction, they have X! Otherwise it's not selling!
hyp0 12y ago
\tangent Google is commited to increasing revenue, but I loved their early idea, of showing you relevant ads that you would want to see. Similar enough to goto.com/overture's idea, of search purely for ads. You're far more likely to pay attention, to click, to buy. And it's sustainable indefinitely because net-better for the world. Although, judging from advertising in general, it may be better for advertisers to get your attention whether you want it or not. And they are the ones who decide whether the advertising occurs. But if another company did ad-relevance better than Google, more efficiently (cheaper) and effectively (clicks, sales), it seems that Google couldn't beat them, because the revenue at first would be lower and Google is Wall St-committed to increasing revenues. They would have to acquire the new company (if they could). Unfortunately, ad-relevance requires data about the person, and Google is best placed for this (alongside Facebook). Despite the privacy-backlash, people increasingly live online and accept the loss of privacy. So, instead, we have startups with new ways to gather new personal data, and are acquired by Google/Facebook.

99 points by reflect 12y ago

deleted 12y ago

[deleted]

twrkit 12y ago
> They need to diversify their sources of revenue more. Self-driving cars, robotics, Nest, Fiber, contact lenses, ... ?
- darkstar999 12y ago
  The key word being "revenue". Google is very dependent on their ad revenue right now. (the parent comment is deleted, so I'm only responding to you)
  - justicezyx 12y ago
    OK, tell me, for a company as large as google, how can I create a revenue source, in 1 year; in such a way that, you never view it as non-revenue generating, but immediately create revenue... Please, let me know, I will be the greatest CEO of all time... If I manage to convince any company that this will work...
    - JetSpiegel 12y ago
      "We are closing Google Reader Free, but you can pay $1 a month!"
      - justicezyx 12y ago
        How to do down vote? I want to down vote your post...
        zaroth 12y ago
        Hmm... That's an interesting way of saying, "Thank you for providing such a great example!"
        JetSpiegel 12y ago
        No need, you are the greatest CEO of all time. At least better then the ones at Google.
- dzhiurgis 12y ago
  Cardboard helmets
tabakd 12y ago
I feel there's a bit of irony in your two statements.
fidotron 12y ago
Most ironic comment ever? Google may need to diversify, but that seems unlikely in a world where you expect all content to be free.

rubiquity 12y ago

If you come to this link about Google from Google.com by searching "Google Reports 22% Revenue Growth" you can skip the pay wall. https://www.google.ca/search?q=google+reports+22%25+revenue+growth https://www.google.ca/search?q=google+reports+22%25+revenue+...

nbody 12y ago
Thank you. F@$!#% paywalls

IBM 12y ago

I've lost track of how many quarters in a row CPC has declined. I think it's 12 or 13 now.

Hermel 12y ago
Do you happen to know the reason? Are more ads being served in countries with lower prices? Or is it due to competition?
- itry 12y ago
  My guess is that the clicks are worth less these days for two reasons: 1) The ads are now displayed so prominently that everybody has to notice them. Earlier, they where less prominent and more clearly marked as ads. So there is probably a shift in demographics. Less dedicated buyers and more people who just stumble upon the ad. 2) On tablets and phones people might a) misclick more and b) surf more without the intend to buy.
  - CaveTech 12y ago
    I'm unsure if misclicks/clicks without intent would drive down the cost of CPC. In the short term, they'd definitely drive up the price. It's possible that lower conversion rates after the click would lead people to put in smaller bids, but I'd say thats unlikely. There's no shortage of people willing to buy ad space with high click throughs.
- CaveTech 12y ago
  Probably due to a lot of factors, but the biggest one is likely ad blindness - People just don't notice Ads anymore. It's especially prevalent in kids but it's probably also taking ground with adults now too.
  - wutbrodo 12y ago
    This would have nothing to do with the effect shown. Paid clicks (i.e. the number of actual clicks on ads) have been growing rapidly over the same time period. Dropping CPCs are pretty obviously a result of the mix shifting to mobile (particularly since both mobile and desktop CPCs are rising).

smackfu 12y ago

Fancy, Google's stock box now has after hours charting. https://www.google.com/search?q=goog https://www.google.com/search?q=goog

alanpca 12y ago
https://www.google.com/search?q=goog#nfpr=1&q=googl https://www.google.com/search?q=goog#nfpr=1&q=googl

jcampbell1 12y ago

It would be interesting to know how much removing the background color from the Adwords ads above the organic results effected profits. I find myself clicking adwords ads frequently since the change. They practically look identical. I imagine it was a nice boost to revenue.

VikingCoder 12y ago
What are you talking about? Do you not see the giant, golden "Ad" next to each ad?
- yabatopia 12y ago
  It happens to me too now and then and I'm pretty sure that we're not the only ones. The Ad icon I see is far from gigantic and more blueish than gold, it's very easy not to notice you're clicking on an advertisement. Maybe15 years of using Google and relying on the first search results on top has caused some sneaky "Ad" blindness. Sometimes I feel sorry for the advertiser when I accidentally click such sneaky text Ad, especially when the first real, natural search result is the link to the advertising company's website, just below the Ad. It feels like a devious way to rip off advertisers who would have been first anyway.
  - shkkmo 12y ago
    Yeah, given the number of times that I have used google to pull up a website, and the company also had the top add makes it seems like they are paying for what they already get. However, they are also blocking a competitor from placing an ad there and potentially siphoning off traffic.
  - wirelessest 12y ago
    As an advertiser, ads when you're the first result aren't a rip off. At that point you're not paying for the ad, you're paying so someone else doesn't get the ad over your results.

davis_m 12y ago

Direct link to the filing if you are interested: http://www.sec.gov/Archives/edgar/data/1288776/000128877614000058/googq22014exhibit991.htm http://www.sec.gov/Archives/edgar/data/1288776/0001288776140...

ChuckMcM 12y ago

Continued erosion of the CPC number (down 2% Q2Q, 6% y/y) so for those who haven't been following this like I have here are the last fourteen quarters: Paid Clicks Cost Per Click Paid Distribution Q-2-Q Y-A-Q Q-2-Q Y-A-Q In $M 2011Q1 18 4 8 -1 337 2011Q2 18 -2 6 12 355 2011Q3 13 28 -5 5 383 2011Q4 17 34 -8 -8 442 2012Q1 7 39 -6 -12 468 2012Q2 1 42 1 -16 507 2012Q3 6 33 -3 -15 556 2012Q4 9 24 -2 -6 634 2013Q1 3 20 -4 -4 680 2013Q2 4 23 -2 -6 706 2013Q3 8 26 -4 -8 755 2013Q4 13 31 -2 -11 824 2014Q1 1 26 0 -9 845 2014Q2 2 25 -2 -6 893 Cost per click is the money that Google gets per click, it keeps going down suggesting to me that the "value" of this advertising is going down. Paid Clicks are clicks on Google ads which are up impressively but my observation is that there are a lot more of them in places than before. And lastly Google is paying nearly $900M/quarter (that is a 3.6B% annual run rate) to "buy" traffic to their properties. From that I conclude that Google's "specialness" is losing its luster, and that results from other services are "good enough". Doing this same math on Bing results and you will see that Microsoft is capturing the lion share of the value that Google is losing here. (and while Blekko is a search engine, we figured out earlier that you couldn't buy traffic against a competitor willing to spend billions a quarter) The other observation is that this realistically, this can't go on. Eventually Bing will be getting equal CPC with Google, and at that point trying to buy traffic or force the use of a particular browser that will only go to one search engine reliably, will make you less competitive than the more efficient guy down the street. I can't wait :-)

jedc 12y ago
But CPC erosion is more likely due to higher % of searches from mobile devices. As Google's ads team works furiously to improve mobile ads, this will likely only go up. (Except that right now growth in the sheer number of mobile ads is outpacing the growth in monetization of those ads.)
- ChuckMcM 12y ago
  As I mentioned above, they have CPC erosion in both their AdMob numbers and their Sites numbers. This statement though I've heard a couple of times: > (Except that right now growth in the sheer number of > mobile ads is outpacing the growth in monetization > of those ads.) I don't think I understand it. I get that more and more ads are being shown (growth in sheer number) but this part I don't get (outpacing ... monetization). So Google is throwing more and more ads out there, and at some point they are going to discover how to make them more valuable to advertisers so that the advertisers will pay more for them? I get that this isn't like a commodity good which is racing toward zero margin, but I don't see mobile ads getting more valuable. I characterize what we do at Blekko as 'utility search', which is what a lot of mobile users seem to need. When they search on their mobile for a restaurant name you can give them "perfect" search results by returning, the home pages of the restaurant, a onebox with hours/phone/address, a link to a review site, and an advertisement for a coupon at that restaurant or a competitor in the same food pallete. Google gets that, its pretty much the formula they use, but it isn't special because pretty much a solid businesses database, set of navigation links, and an ad feed for restaurants is all you need to serve that up. And other people are willing to give the phone provider a bigger cut of the ad revenue. That is why I'm having a hard time imagining a way that Google is going to pull higher CPCs here. It feels very commodity to me and that is a margin game. As a margin game that 32% net margin which is funding free food, self driving cars, and moonshots comes under pressure.

programminggeek 12y ago

More clicks, less value. Seems like mobile is driving down the CPC.

sscalia 12y ago

"Google has become 22% better at selling its users habits and personal information to advertisers"

JetSpiegel 12y ago
http://tvtropes.org/pmwiki/pmwiki.php/Main/TwentyPercentMoreAwesome http://tvtropes.org/pmwiki/pmwiki.php/Main/TwentyPercentMore...
skj 12y ago
Starting off with an admission that I'm a Google fanboy and employee... I hate this sentiment. It's silly. Google does not sell any information to anyone. Google just shows people targeted ads. If you can show a way to infer personal details from the mere fact that someone is shown a particular ad (or particular huge set of ads), then publish your results so Google can figure out how to not leak that information.
- duncanawoods 12y ago
  There is only a subtle distinction between selling an information service like targeting and selling the underlying information. Consider, a mobile phone network that sold drone strikes on its users using the privileged information they have on their location. The precise flow of money and information is not that important to the consequence for the end user. Google targeting is "using information about me to benefit another company for financial gain of Google". It is not silly to call this selling...
  - skj 12y ago
    Firstly, comparing ad views to drone strikes is absurd in any context, and the only purpose can be some terrible appeal to emotion. Even if we were to go with this analogy, the person purchasing the drone strike still doesn't have the privileged information. So, even in this absurd world, no information was sold. The fact that it's terrible for the user (almost as bad as seeing an ad on a site in exchange for that site costing no money!) is irrelevant. Secondly, > It is not silly to call this selling... yes it is! When you sell X to someone, at the end of the transaction, they have X! Otherwise it's not selling!

hyp0 12y ago

\tangent Google is commited to increasing revenue, but I loved their early idea, of showing you relevant ads that you would want to see. Similar enough to goto.com/overture's idea, of search purely for ads. You're far more likely to pay attention, to click, to buy. And it's sustainable indefinitely because net-better for the world. Although, judging from advertising in general, it may be better for advertisers to get your attention whether you want it or not. And they are the ones who decide whether the advertising occurs. But if another company did ad-relevance better than Google, more efficiently (cheaper) and effectively (clicks, sales), it seems that Google couldn't beat them, because the revenue at first would be lower and Google is Wall St-committed to increasing revenues. They would have to acquire the new company (if they could). Unfortunately, ad-relevance requires data about the person, and Google is best placed for this (alongside Facebook). Despite the privacy-backlash, people increasingly live online and accept the loss of privacy. So, instead, we have startups with new ways to gather new personal data, and are acquired by Google/Facebook.