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Google’s Q2 misses expectations despite Play Store, Chromebook success

Mobile ad spend likely to blame
Fri Jul 18 2014, 10:17
Google logo (Robert Scoble Flickr)

GOOGLE ANNOUNCED its second quarter earnings on Thursday, and while revenues saw a notable increase, the firm's profits missed analysts' expectations.

On its second quarter earnings call, Google announced that revenues increased 22 percent year-on-year to $15.96bn, beating analyst forecasts. However, the firm also announced $3.4bn in profit, which failed to match Wall Street expectations.

Google credited its growing revenues to advertising, with the firm boasting that paid clicks on its ad network were up nine percent year on year during the quarter, while paid clicks from Google's own websites, including Maps and Youtube, were up 33 percent during the three month period.

However, the firm seems to be in a similar situation as Facebook, which is still struggling to gain mobile ad revenues. According to eMarketer, Google's share of US mobile ad spending dropped almost 50 percent from 2012 to 2013.

During its earnings call, Google also said that the Google Play store continues to increase its cash flow, while Chromebooks are also proving a success for the firm with Google boasting that over one million were sold into schools in the second quarter of 2014.

Google didn't shed much further light on its financials, but did boast that the number of employees at the company is now 52,069, up from the 49,829 the firm had as of the end of March. This likely is a dig at Microsoft, which yesterday announced plans to axe 14 percent of its workforce, with 18,000 staff set to face the chop.

"Google had a great quarter with revenue up 22 [percent] year on year, at $16.0bn", said Google CFO Patrick Pichette. "We are moving forward with great product momentum and are excited to continue providing amazing user experiences, with a view to the long term."

During its second quarter earnings call, Google also announced that its chief business officer Nikesh Arora is leaving the company for Softbank. Google veteran Omid Kordestani will fill his role for the time being until a replacement is chosen. µ

 

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