Google Sizzles with Billions of Sales, Profits in Q2 2012
Google came out Thursday blazing with impressive numbers as the Internet giant reported a general profit of $US2.79 billion in the second quarter, which was backed by an overall revenue of $US12.21 billion.
The company's global operations grew by 11 per cent in net income whiles sales surged by 35 per cent, including the recently acquired Motorola Mobility.
The bulk of its total sales in the period, Google said, was realised through it main growth engine - online search advertising, which in the quarter alone packed whooping revenues of $US8.36 billion and rose by more than 20 per cent from the previous result.
Google, however, noted that the revenues generated from advertisers, meaning the amount being paid per click, have been shrinking in the past three quarters - from eight per cent and 12 per cent dips in the December 2011 and March 2012 quarters, respectively, to the 16 per cent drop in June.
The only reason that profit in that business, which in fact is Google's main piggy bank, continue to grow is the volume of overall consumer clicks that advertisers in Google attract, which in the last period ballooned by 42 per cent when pitted to the numbers posted in the corresponding quarter last year.
The trend, which sends some alarms to market watchers, was attributed to the rise of mobile computing - a platform that appears to be paying less in advertising dollars per view as compared to traditional computing.
But Google has been rolling out measures to cope with the changing advertising landscape by mainly engineering more support for its mobile platform, Android, to get ahead of its main rival, Apple's iOS.
Experts said it would be a battle of mobile ecosystems - with the more expansive and intuitive provider expected to lure more global consumers, which translates to higher advertising visibility.
Google knew it can ill-afford to relax, so apart from the existing Android devices being sold by its partner manufacturers, the company released the Galaxy Nexus, both in tablet and smartphone form, to ramp up the possibility of increasing its market pie.
Also, Google has recently disclosed plans to enter the cloud computing business that would soon allow firms to entrust their data and application needs on servers that will hum along on Google's technological prowess.
The initiative, according to Google chief business officer Nikesh Arora, promises to be another expansion focus for the tech giant, which now enjoys cash holdings of more than $US43 billion.
"It's going to be a future growth engine for Google," The Wall Street Journal reported Mr Arora as saying during the company's conference call on Thursday.
And growth also means improving on the lot of Motorola, which delivered more than $US1 billion in revenue but was hobbled too by operating loss of $US233 million.
Google admitted that it requires more time to actually figure out the exact role of Motorola Mobility, which analysts said was mainly annexed by the tech titan for it rich patent reserves, on its future business path.