“Google Inc inadvertently released its draft quarterly results hours ahead of schedule, missing expectations on both revenue and earnings and wiping 9 percent off the market value of the Internet search and advertising leader,” Alexei Oreskovic and Edwin Chan report for Reuters. “Google said its financial printers, RR Donnelley, filed its draft results statement without authorization. The company said it was working now to finalize the statement. The surprise announcement, which had been expected after the market close, pushed its shares down 9 percent to $687.30 before trading was halted by Nasdaq… Shares of RR Donnelley, the U.S. printing services company, slid as much as 5 percent. They were down 2.2 percent at $10.61 in afternoon trade.”
Oreskovic and Chan report, “Google, which has been struggling to turn around loss-making cellphone maker Motorola Mobility that it bought for $12.5 billion, reported a 20 percent dive in net income to $2.18 billion. Excluding certain items, it earned $9.03 a share, vastly underperforming the $10.65 analysts had expected, on average. Google reported net revenue – excluding traffic acquisition costs – of $11.3 billion for the third quarter, below Wall Street’s expectations for about $11.9 billion. For the fourth consecutive quarter, the company reported a decline in average cost-per-click, a critical metric that denotes the price advertisers pay Google.”
“Average CPC declined 15 percent from a year ago and 3 percent from the second quarter of this year. Analysts say that Google, like many of its peers in the Internet industry, has been struggling to adapt to the rapid consumer uptake in mobile devices. Advertisers pay far less for adds on smartphones and tablets than for similar ads on desktop computers,” Oreskovic and Chan report. “‘The core business seems to have slowed down pretty significantly, which is shocking,’ said B. Riley analyst Sameet Sinha. ‘The only conclusion l can look at is, search is happening more and more outside of Google, meaning people are searching more through apps than through Google search.’”
Read more in the full article here.
MacDailyNews Take: RR Donnelley, enjoy that big fat lawsuit you’re about to get slapped with, ya hear?
What you are seeing is a paradigm shift. Until mobile ad rates catch up and unless Google can figure out a way to monopolize it they way they did with the desktop (hint, they can’t, thanks to Apple), they are a declining one-trick pony. If they don’t come up with some new, meaningful revenue stream, they are in for a world of hurt. Android isn’t it – they make little or no money from it and the users are cheapskates, so the ad rates Google can command for Android suck. The desirable users – the ones with money to spend and the will to spend it – are on iOS and seeing Apple iAds.
Google’s going to rue the day they got greedy by deciding to try to work against Apple instead of with them. – MacDailyNews Take, March 09, 2010