Google Fourth Quarter Results Fall Short Due to Dropping Advertising Rates
Google’s financial results in the last quarter did not meet Wall Street expectations and this is all because of the big decline in search advertising prices.
Google, Internet’s search giant, accounted that they have gotten a 27% rise in revenue to $10.6bn in the last quarter, but in contrast, the firm’s revenues for every share were at $9.50, which fell lower than the $10.49 that financial analysts had forecasted. This result had caused the shares to fall down at more than 9% in after the numbers have been released.
After the deductions of advertising commissions, Google’s total revenue has reached $8.1bn, which was around $300m. This number is much lower than the average that the analysts have predicted.
This unsatisfactory performance was the result of the unexpected decline in the rates that Google amasses per click. The standard rate has declined by 8% from the same quarter two years ago.
Google explained that the downfall in cost per click prices was because of the changes done in the company’s advertising formats, and this has forced the immense increase in the sum of the number of clicks done by Internet users, which is high at 34% year after year.
The downfall actually reversed the occurrence that happened in the earlier part of the year. The search giant’s year-on-year rise in their cost per click rates has been ranging from about 5% to 12% rise during the first 3 quarters of two years ago.
The last quarter results marked Google’s first time to get revenue that has exceeded $10bn. This in comparison with any 3-month period results in all of the company’s 13-year history.
But that milestone has not been impressive enough for the investors. Shares of Google dropped at $58.56 to $581.01 in the extended trading yesterday.