Assignment 4 Essay

Submitted By IvanPrince1
Words: 439
Pages: 2

Assignment 4
We learn some more insight to Google’ business side by an article of April Dembosky, “Google fails to stem slip in ad prices.” The article starts of saying that on Thursday, Google reported mixed results for the first quarter, beating analysts’ forecasts on profits but missing on revenues as the company still seeks to stem the slip in advertising prices caused by the growth of mobile usage. The proportion of times users click on ads they see, or “paid clicks”, has slowed to 20 per cent, compared to 24 per cent in the last three months of 2012. Eighteen months ago, the increase in mobile search caused a collapse in the prices Google advertisers pay each time a user clicks on an ad, because mobile ads are cheaper than ads shown on desktop computers. But Google has shown that prices are continuing to stabilise, with the cost per click falling 4 per cent in the first quarter, compared to the 6 per cent decline in the final quarter of last year, and a 15 per cent decline in the third. Google reported net revenues for its core Internet operations of $9.99bn, falling short of analysts’ expectations of $11.1bn. Profits rose 15 per cent to $11.58 per share, on a pro forma basis, ahead of Wall Street’s projected $10.69. However, Google missed Wall Street’s expectations on overall revenues, reporting $14bn compared to analysts’ anticipated $14.2bn. The miss was driven by lower than expected revenues of $1.02bn from Motorola Mobile’s hardware business. Patrick Pichette, chief financial officer, said Google is seeing a lot of progress in transitioning Motorola’s businesses since it was acquired in May of last year, but also warned “results from that segment will continue to be variable.” He defended the…