Google Revenue Increases Despite Motorola Losses
July 20, 2012

Google Revenue Increases Despite Motorola Losses

redOrbit Staff & Wire Reports - Your Universe Online

Second-quarter earnings proved to be a mixed-bag for Google, as the Mountain View, California-based tech giant saw an increase in revenues but a decrease in the per-click earnings brought in by their advertising department, according to various media reports.

The company, who announced their financial status for the quarter ending June 30 on Thursday, earned revenues of $12.21 billion, up more than one-third from first-quarter revenues of $12.21 billion, TechCrunch writer Sarah Perez said. Their non-GAAP earnings per share (EPS) for the quarter was $10.12, and their non-GAAP net income was $3.35 billion, which the Wall Street Journal said was an increase of 11%.

Google's new subsidiary, Motorola, contributed $1.25 billion in revenue, or approximately one-tenth of the company's consolidated second-quarter 2012 total, CNET's Marguerite Reardon reported on Thursday. Approximately $843 million of that revenue came from Motorola's mobile business, and about $407 million came from their set-top box business, she added.

However, "even though Google beat expectations overall and Motorola contributed a nice chunk of revenue, Motorola reported an operating loss of $233 million," Reardon explained. According to her, Motorola's mobile division lost $192 million, and according to Claire Cain Miller of the New York Times, that has had a negative impact on Google's advertising business.

"Advertising“¦ simply is not always as valuable on phones, so the price that advertisers pay for clicks on Google ads has decreased 16 percent since last year," Miller wrote. "Still, the number of paid clicks on ads increased 42 percent over last year, and Google dominates mobile advertising with 95 percent market share for search ads and 52 percent market share for all types of mobile ads, according to eMarketer."

Revenue from Google-owned websites accounted for nearly 70% of the company's total second-quarter revenue, bringing in $7.54 billion, or 21% more than the $6.23 billion they earned during the same period in 2011, Perez noted. Excluding Motorola, the search engine giant posted $8.36 billion in total revenue (less than the $8.41 billion anticipated by analysts), but their net revenue numbers increased from $6.92 billion to $9.61 billion, Miller added.

“Google standalone had a strong quarter with 21% year-on-year revenue growth, and we launched a bunch of exciting new products at I/O — in particular the Nexus 7 tablet, which has received rave reviews,” Google CEO Larry Page said in a statement Thursday. "This quarter is also special because Motorola is now part of the Google family, and we´re excited about the potential to build great devices for users.”