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Google Q4 2013: $16.86 Bn Revenue; Paid Clicks Up 31%, CPC Down 11%


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After selling Motorola Mobility to Lenovo for $2.9 billion yesterday, Google has reported consolidated revenues of $16.86 billion for the quarter ended December 31, 2013, a 17% increase from $14.42 billion revenues in the same quarter last year. Note that these revenues include a traffic acquisition cost of $3.31 billion.

Highlights

– Google Revenues (Advertising and others) up 22%: Google reported increased revenues of $15.72 billion, a 22% increase from $12.91 billion revenues in the same quarter last year. These revenues represent 93% of Google’s consolidated revenues for the quarter.

– Motorola Mobile Revenues (Hardware and others) Declines: Motorola Mobile reported revenues of $1.24 billion, down 17.9% from $1.51 billion in Q4 2013. These revenues represent only 7% of Google’s consolidated revenues for the quarter.

– Google owned sites vs network: Google-owned sites reported revenues of $10.55 billion for the quarter, registering a 22% increase year-on-year (YoY) from $8.64 billion in Q4 2012, while the network revenues from partner sites (i.e. through Adsense programs) were $3.52 billion, a minor 3% growth YoY from $3.44 billion in Q4 2012.

The total advertising revenues were at $14.07 billion for the quarter and is still the major contributor for Google’s revenues, accounting for around 89.5% of its revenues and around 83.5% of Google’s consolidated revenues during the quarter.

– Other Revenues: Other revenues for the company was at $1.65 billion for the quarter, almost doubling from $829 million in Q4 2012. Other revenues comprises revenues generated from content sales and hardware sales on Google Play.

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Beginning last quarter (Q3 2013), Google and Motorola segment revenues have been impacted by intersegment transactions which resulted in intersegment and deferred revenues of $105 million in the current quarter, which are eliminated from the consolidated results.

– International Revenues: Google revenues from outside of the United States was at $8.77 billion, which represents 56% of its total revenues for the quarter, compared to 56% in the previous quarter (Q3 2013) and 54% in the same quarter last year (Q4 2012).

– Paid Clicks: Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of AdSense partners, increased around 31% YoY, and around 8% quarter on quarter (QoQ).

- Cost-Per-Click: Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of AdSense partners, however declined by around 11% YoY and around 2% QoQ.

– Traffic Acquisition Costs: As stated earlier, traffic acquisition cost (TAC), the part of Google’s revenues which is shared with its partners, was at $3.31 billion for the quarter, up from $3.08 billion reported in the same quarter last year. Of this, $2.49 billion was paid by Google to its network members and the remaining $824 million to certain distribution partners & others who directed traffic to Google’s website.

– Total Cash: As of December 31, 2013, Google has $58.72 billion money in form of cash, cash equivalents, and marketable securities, as compared to $56.52 billion in the previous quarter.

– Headcount: Globally, Google has 47,756 full-time employees as of December 31, 2013. This comprises 43,862 employees in Google and 3,894 employees in Motorola. In comparison, Google had 46,421 full-time employees (42,162 in Google and 4,259 in Motorola Mobile) in the previous quarter.

Other developments during the quarter

– Google India reported revenues of Rs 2,076.79 crore for the 12 month period ended March 31, 2013 (FY13), registering a significant 78.7% growth from 1162.19 crore from the previous financial year (FY12). Profit after tax however declined by 9.7% to Rs 137.4 crore from Rs 150.73 crore in FY12.

– Google partnered Archaeological Survey of India (ASI) to add 360-degree street view imagery of 100 prominent heritage sites to Google Maps.

– It introduced Chromebooks in India by launching two new devices – Acer C720 and HP Chromebook 14. Samsung also launched its Chromebook later. These are available for purchase in offline stores like Reliance Digital and Croma stores and e-commerce stores like Flipkart.

– Google’s flagship phone Nexus 5 was launched on Google Play in India.

– Google organized Great Online Shopping Festival (GOSF) which faced a lot of issues initially, but after the issues were resolved, most companies claimed to have received substantial sales from the initiative.

– Google Hotel Finder added Indian online travel agents like MakeMyTrip and Yatra.

– Google’s YouTube is also exploring partnerships with DTH companies in India.

Download: Release | Financials