Google posts 22% rise in Q2 revenue
18 Jul 2014
Google posted a 22-per cent increase in second quarter revenues yesterday, with sales hitting $16 billion.
The company, however, continued to spend on potential new businesses like self-driving cars and ultra-fast internet networks that hurt its bottom line. The web software giant posted lower earnings with profit per share of $6.08 against the projected $6.25.
The company further announced that long-time chief business officer Nikesh Arora was leaving the company to join Softbank as vice chairman, with former sales chief Omid Kordestani to replace him (See: Nikesh Arora leaves Google to join Japan's SoftBank).
Google CFO Patrick Pichette said the company had a great quarter and was moving forward with great product momentum.
Revenue from Google's websites was up 23 per cent to $10.94 billion, while sales through its network business, including affiliate sites, was down 7 per cent to $3.42 billion.
Operating expenses increased to $5.58 billion from $4.45 billion in the year-ago quarter.
According to the internet search company, it spent $2.65 billion in capital expenditures, most of which covered data-centre construction, real estate purchases and production equipment.
High-profile Nikesh Arora talked briefly on an earnings call and thanked Google for a "phenomenal" 10 years adding he looked forward to "cheering them on from the sideline."
Pichette said on the call that the company was moving forward with great product momentum.
Google shares were up about a per cent to $579 in after-market trading after the release of the earnings figures.
According to Google, a key factor in revenue was the rise in "paid clicks," for ads related to searches on Google and its partner sites.
Total paid clicks increased 25 per cent from a year ago and 2 per cent from the past quarter, even as the average cost per click declined 6 per cent from a year earlier.
According to eMarketer, Google was the leader in digital advertising with a 31.9 per cent share of the global market in 2013, with the closest rival being Facebook with 5.8 per cent.
eMarketer added Google had over 50 per cent of the worldwide mobile ad market.