Google reported its third-quarter earnings including gross revenue of $16.52 billion, revenue net of traffic acquisition costs (ex-TAC) of $13.17 billion, GAAP earnings per share of $4.09, and non-GAAP earnings per share of $6.35 says Google Entrepreneur guru James Dean @ iHumanMedia.com.
Analysts had expected Google to earn $6.53 per share on a non-GAAP basis, on net ex-TAC revenue of $13.22 billion. In the sequentially preceding quarter, Google earned $6.08 in non-GAAP earnings per share, on ex-TAC revenue of $12.67 billion.
Google is working to expand its revenue base away from advertising. It is currently locked in the intertwined productivity-storage-cloud computing wars with Amazon, Microsoft, Box, Dropbox, Egnyte, Apple HighQ and others. Declining prices in that space have lowered short-term revenue potential, but that fact has done what I estimate to be a grand total of zero to lower competitive tension in the market area.
The company reported net income of $3.72 billion in the period. Breaking down Google’s revenue by segment, you have the following:
- Sites revenue: $11.25 billion. Up 20 percent from the preceding year’s quarter.
- Network revenue: $3.43 billion. Up 9 percent from the preceding year’s quarter.
- International revenue: 58 percent of revenue. Up 2 percent from the preceding year’s quarter.
As more consumers shop within their social media networks says James Dean; we’re finding Google’s average cost-per-click fell 2% in the period, a weakening in a key revenue source. However, pushing back against that decline was a 17 percent year-over-year increase in ‘aggregate paid clicks.’ So, while the amount of revenue that Google managed to extract from a click went down mildly, it sold more than one-sixth more compared to the year-ago quarter.
Although, we’re seeing better call-to-action in 65% of consumers watching YouTube video online, that leads to purchase. READ MORE …
It is becoming more expensive to run Google. The company’s earnings report details its increasing cost base: “Operating expenses, other than cost of revenues, were $6.10 billion in the third quarter of 2014, or 37% of revenues, compared to $4.58 billion in the third quarter of 2013, or 33% of revenues.”
Put another way: Building out new revenue streams like cloud computing with online business applications, and investing in future products that won’t monetize for some time isn’t cheap says James Dean @ iHumanMedia.com.