Google Q4-2013 net up 17% at $3.38 bn

Internet search giant Google Inc has reported consolidated net income, including net loss from discontinued operations, of $3.38 billion, in the fourth quarter of 2013, up nearly 17 per cent from $2.89 billion in the fourth quarter of 2012.

Consolidated revenues for the quarter also increased by a similar percentage year-on-year to $16.86 billion during the quarter ended 31 December 2013, against $14.42 billion in the fourth quarter of 2012.

Google said the results were boosted by rising advertisement revenues and play store sales, which were consistent with sales, on a gross basis.

"Revenue growth was driven by content and app sales in the play store," said Patrick Pichette, Google's chief financial officer. It seems that the release of the Nexus 5 and strong demand for the Chromecast also helped.

"Play hardware sales drove a big chunk of quarter-over-quarter growth. Nexus 5 was very strong for us, and the Chromecast was a best seller all quarter," said Pichette. While Chromebooks sales were strong, they did not contribute to Google's bottom line. "Most of the Chromebooks are sold through other parties, so we don't book revenue on them."

Google also spent $3.31 billion or 24 per cent of its advertising revenues on traffic acquisition in the fourth quarter of 2013.

Paid clicks, which measure volume in Google's ad business, were up 31 per cent over 2012, while the cost per click, a measure of the margin on its core business, decreased 11 per cent year over year.

Google, meanwhile, is fine-tuning its mobile strategy by exiting smartphone manufacturing and selling its Motorola handset unit to Lenovo Group Ltd for $2.91 billion.

Besides an operating loss of $384 million, Google is selling the Motorola business at a huge loss against its acquisition price of $12.4 billion (See: Lenovo to buy Motorola Mobility from Google for $2.91 bn).

Google earlier this month said it was spending $3.2 billion in cash to buy Nest Labs Inc, the digital thermostat maker led by former Apple Inc executive Tony Fadell (See: Google to acquire Nest Labs, maker of smart devices).

Google, which had $58.7 billion in cash at the end of last quarter, said earlier this week it's buying artificial-intelligence company DeepMind Technologies Ltd (Google to buy London-based artificial intelligence company DeepMind).http://www.domain-b.com/companies/companies_g/google/20140127_deepmind.html

The Mountain View, California-based Google climbed 4.1 per cent in extended US trading. The shares advanced 2.6 per cent to $1,135.39 at yesterday's close in New York. The stock climbed 58 per cent in 2013, compared with a 30 per cent gain in the Standard & Poor's 500 Index.