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Google Q3 2012 Concall: On Multi Screen Opportunities, Mobile Run Rate & Trends

Google has reported consolidated revenues of $14.1 billion for the quarter ending September 30, 2012, a 45% growth in revenues year-on-year (YoY) and 15.5% growth quarter-over-quarter (QoQ). Here are some notes from the Google’s Investor conference call:

Android Device activations: Google CEO Larry Page stated that there are more than 500 million Android devices with more than 1.3 million Android devices being activated every day, a number revealed by Hugo Barra, Director of Product Management for Android in September 2012.

Multi-screen opportunities: Page stated that Google’s search query volumes has grown during the quarter as compared to last year, although he didn’t reveal any specific information regarding this. Page noted that they are currently seeing tremendous innovation in the advertising segment and as people transition from a single screen to multiple screens, the company sees opportunities to drive innovation and higher monetization, just like Search in 2000.

Pointing out an example for multi-screen opportunity, Page noted that Google Chrome users can now seamlessly sync browser content including bookmarks, tabs, and browser history across various platforms including Windows, Mac, iOS and Android among others, allowing them to switch to any device based on their preference.

Google’s Mobile run rate: He stated that Google’s mobile run rate is now over $8 billion, up from $2.5 billion run rate last year. However, its worth noting that this revenue includes gross revenues from mobile advertising, Google Play content and Google Play app sales, while it included only the gross revenue from mobile advertising last year.

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On Shutting Down Products: Page stated that Google has closed or integrated 60 products and features over the last year, including 19 products last month to focus on existing products and they plan to further converge their services in the future, in a bid to offer a single consistent experience across the platform.

Converging Ad campaigns: On similar lines, Page mentioned that they are currently working on simplifying their ad campaign experience, allowing advertisers to focus only on their target audience rather than the technology behind it to deliver cross-platform campaigns across various devices.

Revenue Streams: Patrick Pichette, Google’s Senior Vice President and Chief Financial Officer stated that Advertising continued to be Google’s major revenue source, accounting for 94% of Google’s total revenues. However its other revenues segment grew to $666 million for the quarter ending September 30, 2012, a significant increase of 52% quarter-on-quarter and 73% year-on-year. He attributed this increase to the growing sales of its Nexus 7 Android tablet.

– Pichette also mentioned the decrease in average cost-per-click (CPC), which declined approximately by 15% YoY and 3% QoQ. However, he mentioned that exchange rate movements affected their CPCs during the quarter and the aggregate CPC would’ve declined only 8% YoY and 1% QoQ, if the foreign exchange rates had remained constant during the period.

Google Headcount: Pichette stated that Google had added around 1,800 people to its headcount for the quarter ending September 30, 2012, however the company’s consolidated business witnessed a decline of over 1,000 people. The company currently employs 53,546 full-time employees, which includes 36,118 full-time employees in Google business and 17,428 full-time employees in Motorola business.

On Google’s Future Focus: Nikesh Arora, Google’s Senior Vice President and Chief Business Officer, stated that Google is currently focusing on four major trends which is currently driving their business growth. These include delivering ad campaigns across multiple screens, ability to give precise answers to their consumers through initiatives like Google Now and Knowledge Graph, increasing the offline brand campaigns with online media and enterprise cloud computing.

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– He claimed that Google’s click-to-call ads had generated around 20 million phone calls per month for their clients, through Google’s various call advertising products. He also claimed that the number of impressions through their DoubleClick AdX advertising exchange and Invite platform has doubled over the last year and more than 100 brands now have over 1 million followers in Google+ including ESPN, PlayStation, Ferrari, H&M, Burberry and Toyota.

– Arora also noted that Google Shopping has now been completely transitioned to a completely paid model based on product listing ads and the company is currently working on creating more video premium inventory without the channel strategy on YouTube. Arora claimed that Google has 200 times more video advertisers than any regular US television network and the advertisers using the Trueview format, which allows users to skip ads after a certain period, has doubled over the last year. He also claimed that an average spending on YouTube has turned out to be 240% more efficient as compared to a corresponding TV spending.

– Arora mentioned that YouTube has live streamed over 1 million hours of video content for the democratic and republic of national conventions till now and had recorded 8 million concurrent live streams for Felix Baumgartner’s space jump earlier in the week.

– He also noted that YouTube had live streamed the Olympics 2012 games to over 64 countries, although he didn’t reveal any specific details about the campaign. In August 2012, YouTube had claimed that users had watched a total 231 million total streams, of which 72 million total streams came from the official IOC YouTube Channel. The company had also claimed that it delivered video for more than 500,000 livestreams at the same time at its peak.

Conference Call Transcript – Courtesy: Seeking Alpha


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– Google Q3 2012: 45% Revenue Growth YoY; $14.10 Billion Total Revenue
Google Q2-2012 Concall: On Motorola Mobility Acquisition, Voice Search & Mobile Advertising
Google Q2 2012: 35% Revenue Growth YoY; $12.2 Billion Revenue

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