Google posts robust earnings
July 17, 2015
After six disappointing quarterly earnings reports, Google beat expectations in the April-June quarter with a net income of 3.9 billion dollars, up from 3.35 billion dollars in the same period a year ago, the company said late on Thursday. Revenues were up 11 percent year-on-year to 17.7 billion dollars, spurred by advertising revenues.
"Our strong Q2 results reflect continued growth across the breadth of our products, most notably core search, where mobile stood out, as well as YouTube and programmatic advertising," new chief financial officer Ruth Porat said. Shares soared almost 12 percent in after-hours trading.
Time spent watching YouTube videos on smartphones or tablets has surged as part of a 60-percent jump in overall viewer time spent on the website, surpassing figures for watching linear television, especially among 18 to 49-year-olds, she said.
Like Facebook, Pinterest and other Internet and social networking sites, Google expects to boost its earnings in the future by attaching "buy buttons" to mobile ads to make shopping easier for smartphone users.
Mobile devices are increasingly consulted before or during shopping trips, particularly in the United States, boosting in-store sales.
Prudent Porat
Porat, who joined Google in late May from banking behemoth Morgan Stanley, is expected to take a more frugal approach to Google's investments. During her first earnings call on Thursday, she said that while Google will continue to explore promising opportunities, it would do so "with great care regarding resource allocation."
The company's rising costs have been driven primarily by a hiring spree and its commitment to so-called "moonshots" that have little or nothing to do with its main business of Internet search and advertising. The list of projects include self-driving cars, medical research, but also plans with a slight whiff of pie in the sky, such as Internet-beaming balloons and an initiative to change the way cities operate.
Google managed to garner a 31.42 percent share of money spent on digital ads worldwide last year. It is expected to slip marginally this year as leading social network Facebook gains ground, according to industry tracker eMarketer.
Google continues to dominate when it comes to online search-related advertising, with its share of the market this year expected to be 54.5 percent, according to the industry tracker.
ng/msh (AFP, AP, dpa)