Google has just released it’s second-quarter earnings and the figures seem good. But that’s what the company has to say. As far as investor’s opinion’s go, they aren’t as good as expected. The earnings figure stands at $6.82 billion, a 24% rise over last year. The results have evoked mixed reactions from the market.
Core Figures
Last year, in the same quarter, Google earned $5.52 billion. So, current results signify some growth story. Google-owned sites contributed close to $4.50 billion, which alone accounts for a 66% of the entire revenue. Further, AdSense contributed $2.06 billion through its partner sites. Accustomed net operating revenues are pegged at $2.67 billion, which accounts for 39% of the total revenue.
Still Under-Performed?
The earnings figures are good, then why does the market have to say these are not good. That’s because Google’s second quarter performance meant that price per share should have rose to $6.45. As such, Google’s shares might have tumbled by now, as the analysts expected.
Search Marketing
Year on year, the aggregate paid clicks have risen to a current figure of 15%. These aggregate paid clicks comprise of clicks related to advertisements shown on Google sites plus the AdSense partner sites. As such, average CPC has risen 4% since last year. Also, Traffic Acquisition Costs have also risen to $1.73 billion in 2010 from last year’s $1.45 billion. These TAC figures account for 26% of the total advertising revenues and are primarily associated with money paid to AdSense coalition partners adding up to $1.46 billion for the given period.
So, what’s next?
CEO, Eric Schmidt, commented on the second quarter results, “We saw strength in every major product area, as more and more traditional brand advertisers embraced search advertising and as large advertisers increasingly ran integrated campaigns across search, display, and mobile. We feel confident about our future, and plan to continue to invest aggressively in our core areas of strategic focus.”
As of now, Google’s second quarter earnings have shown a substantial increase in earnings. Defying speculations the company has raised its profits and that will reflect in its future plans. The company plans to invest $100 – $200 million in Zynga. So, be prepared to see another major launch from Google in the upcoming few months. As of now, Google’s shares are soaring and investors are having a pretty good time.
