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Google sales soar on Motorola Mobility and advertisements.

San Francisco: Google, owner of the world's most popular search engine, said second-quarter revenue surged 35 per cent, helped by its acquisition of Motorola Mobility Holdings and as more users clicked on

advertisements.

Including Motorola Mobility, sales were $12.2 billion, compared with $9.03 billion a year earlier, the Mountain View, California-based company said on its website on Friday. Profit before some costs was $10.12 a share. Google's $12.5 billion acquisition of Motorola Mobility closed in May.

Google has been using ads on mobile devices and the YouTube video site to bolster revenue, and it continues to benefit from user queries on its home page.

The company controls more than two-thirds of the US search market, according to ComScore, and its sales are tied to the number of times Web surfers click on ads that run on its pages and partner sites. The number of such clicks rose 42 per cent last quarter.

Excluding revenue passed on to partner sites and the impact of Motorola Mobility, second-quarter sales were $8.36 billion.

On that basis, analysts were projecting sales of $8.39 billion, according to data compiled by Bloomberg.

Google shares rose three per cent to $610.82 at the close in New York, paring the decline for this year to 5.4 per cent.

The shares may have received a bit of a "relief rally" as Google delivered higher revenue than some of the more pessimistic estimates, said Clayton Moran, a Delray Beach, Florida-based analyst at Benchmark.

Moran had estimated adjusted sales of $8.26 billion. Motorola Mobility contributed revenue of $1.25 billion for the period. Total net income rose to $2.79 billion, or $8.42 a share, from $2.51 billion, or $7.68 a share, a year earlier.

While total clicks on ads increased, the average cost per click in the second quarter declined 16 per cent from a year earlier, and was up one per cent from the prior period.

The average cost per click was dragged down by currency exchange rates, including the strengthening dollar against the euro, said Chief Financial Officer Patrick Pichette during a call with analysts. Had foreign exchange rates remained constant from a year earlier, Google's revenue in the second quarter would have been $350 million higher.

The company saw relative strength in the US, Canada and Asia. Southern Europe, including Spain, was hampered by a weak economy, said Nikesh Arora, a Google senior vice president. Still, northern Europe performed better, with particular strength in the UK, he said on the call.

"Our business had a very strong quarter," he said. As Google had expected, Chief Executive Officer Larry Page didn't join Friday's call because he lost his voice. Arora said Page continues to run the company and is involved in strategic decisions.

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Publication:Times of Oman (Muscat, Oman)
Date:Jul 23, 2012
Words:499
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