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Google revenues at $15.42 Bn for Q1 2014; Paid clicks up 26% while CPC fell 9%

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In the quarter where Google sold Motorola Mobility to Lenovo for $2.9 billion, the company has reported consolidated revenues of $15.42 billion for the quarter ended March 31, 2013, registering a 19% increase from $12.95 billion revenue in the same quarter last year.

Note that these revenues includes a traffic acquisition cost of $3.23 billion for the quarter. Google has also stopped including Motorola Mobility revenues within its consolidated results, presenting it as “discontinued operations”.

Highlights

Google owned sites vs network: Google-owned sites reported revenues of $10.47 billion for the quarter, registering a 21% increase year-on-year (YoY) from $8.64 billion in Q1 2013, while the network revenues from partner sites (i.e. through Adsense programs) were $3.40 billion, a modest 4% growth YoY from $3.26 billion in Q1 2013.

#-earnings-march-2014

The total advertising revenues was at $13.87 billion for the quarter and continues to dominate Google’s overall revenues. It currently accounts for around 90% of Google’s consolidated revenues during the quarter.

Other Revenues: Other revenues for the company was at $1.55 billion for the quarter, registering a 48% increase from $1.05 billion in Q1 2013. Other revenues comprises revenues generated from content sales and hardware sales on Google Play.

International Revenues is 57% of total revenues: Google revenues from outside of the United States was at $8.76 billion, which represents 57% of its total revenues for the quarter, compared to 56% in the previous quarter (Q4 2013) and 55% in the same quarter last year (Q1 2013).

– Motorola Mobility Revenues: While Google has stopped including Motorola Mobility results in its overall results, the company noted that if it was presented an operating segment, Motorola Mobility’s revenues would’ve been $1.45 billion, up from $1.02 billion reported in the same quarter last year. The losses however also increased to $198 million for the quarter, from $182 million in the same quarter last year. This includes a $74 million pre-tax adjustment related to certain revenue deferral for the segment.

Paid Clicks increase by 26%: Aggregate paid clicks, which includes clicks related to ads served on Google sites and AdSense partner sites, increased by around 26% YoY although it declined by 1% quarter-on-quarter (QoQ)

Cost-Per-Click fell 9%: Average cost-per-click, which includes clicks related to ads served on Google sites and AdSense partner sites, also declined by around 9% YoY and remained flat QoQ.

Traffic Acquisition Costs: As mentioned earlier, traffic acquisition cost (TAC) which is essentially a part of Google’s revenues shared with its partners, was at $3.23 billion for the quarter, up from $2.96 billion in the same quarter last year. Of this, $2.39 billion was paid by Google to its network members and the remaining $845 million was paid to certain distribution partners & others who directed traffic to Google’s website.

Nest Acquisition pulled its earnings: Google CFO Patrick Pichette had mentioned that buying the home automation company Nest for $3.2 billion in cash earlier this year, impacted its earnings for the quarter. This was primarily because of the payroll costs associated with Nest’s research employees.

Total Cash: As of December 31, 2013, Google has $59.38 billion money in form of cash, cash equivalents, and marketable securities, as compared to $58.72 billion in the previous quarter.

Headcount: Globally, Google has 49,829 full-time employees as of March 31, 2014. This includes 46,170 employees in Google and 3,659 employees in Motorola. In comparison, Google had 47,756 full-time employees (43,862 in Google and 3,894 in Motorola Mobile) in the previous quarter.

Recent Google developments in India

– E-Commerce ventures Myntra and Jabong had partnered Google India to host a Google+ Shoppable Hangout in January 2014.

– Added 30 more heritage sites to its Street View offering, in partnership with the Archeological Survey of India.

– Rolled out indoor maps service in India, covering more than 75 buildings in cities like Bangalore, Chennai, Delhi, Goa, Hyderabad, Mumbai and Pune.

– Sun TV had signed agreements to offer content from on its television channel Sun TV on YouTube and iTunes globally on a pay-per-view basis.

Ali Hussein, Head (Entertainment Partnerships) at YouTube India and Google Mapmaker Creator Lalitesh Katragadda had left the company.

– The Competition Commission of India (CCI) had also fined Google Rs 1 crore for failing to comply with directives given by the Director General seeking information and documents. (Also readWhat the Competition Commission wants to know about Google in India).

– Updated its transparency report with data from the last six months of 2013 i.e. July-Dec 2013. Google mentioned that it had complied with 66% of Indian govt’s 2,513 user data requests during this period.

DownloadPress Release | Financials

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