Google shares rose 5% in after hours trading as it reported better than expected results for Q412. Revenues were up a pretty impressive 33% although profits grew a more modest 7% yoy. For FY12 as a whole, Google’s revenues topped $50b for the first time – roughly equal to their massive cash pile ($48.1b) at year end .
It was international markets – up 23% - that were the real star. It was revealed that Google’s UK revenues grew by 22% yoy to $1.3b in Q4. ‘Cost-per-click’– although down 6% yoy – actually increased by 2% qoq. This is significant as the well publicised move to mobile has meant that advertisers pay less (roughly half) for mobile ads. Google clicks via PCs have decreased from 77% to 73% in six months when Google clicks from smartphones increased from 23% to 27%. The increased use of Google on smartphones and the cost per click increase were welcomed by analysts. Also, to set against the cost per click reduction, the number of clicks was up 24% yoy. eMarketeer reckons that Google holds 41% of the US online ads market - a clearly dominant position. This is a high growth market - up c15% in the last year.
Motorola Mobility, however, was still loss making – some $353m in the quarter. Google plans to continue its sale of unwanted Motorola assets.
Although this may all sound like ‘good news’, it is worth pointing out that Google shares have significantly under-performed NASDAQ in the last few months. Google shares had traded as high as $767 in Oct 12 compared to $702 now.
All eyes on Apple results tomorrow.
Footnote - Google revealed that Psy's 'Gangnam Style' video had been viewed over 1.2b times and had generated over $8m in advertising revenues. Anyone (probably me) who doubted that Youtube couldn't be successfully monetized should take note and hang their heads...