Google‘s most recent quarterly financials continue a tale of large-scale success for the company: $2.3 billion profit, $8.6 billion revenue. But the $8.08 per-share earnings fell short of Wall Street’s $8.11 projections and may be evidence that it is possible to gain ground on the internet’s uber-brand.
According to search-marketing firm Experian Hitwise, Google dropped its slice of the market from 71% in the first quarter of 2010 to 66% this quarter.
It’s clear to newly appointed chief executive Larry Page – who made a cameo appearance on a call with analysts – that future growth will come outside of search, so the company is touting the big investments it’s making in display ads, YouTube, mobile and the Chrome web browser.
Page is also emphasizing new executives. Outgoing Senior vice-president of product management Jonathan Rosenberg was thanked for his service during the earnings call, and Susan Wojcicki, head of advertising products and one of Google’s earliest employees, gave an update on Google’s display business, up five times since its acquisition of DoubleClick in 2007.
“We can think of display in two categories,” she said, “performance-oriented, or more brand-oriented.” Last quarter the company allowed big brand-focused advertisers to buy premium inventory on a guaranteed basis. While she didn’t elaborate, the company’s largest well of premium inventory is YouTube, which she said “is doubling revenue year over year.”
Underscoring the growing importance of video advertising, Google recently acquired Next New Networks, which helps promote web shows and package them to advertisers. The advantage of this arrangement is that Google doesn’t directly produce any of the content but can sell advertising against it. The problem for the moment is there’s not enough advertising-friendly content to attract big money, which has prompted Google to set aside as much as $100 million to help finance more production across many content partners.
Another area of Google’s growth is in the mobile sector with its AdMob advertising platform, which is seeing 150 million ad requests per month from both Apple- and Android-powered phones and its Chrome web browser. Chief Financial Officer Patrick Pichette said the company is investing more heavily in Chrome, which is seeing big share in a number of markets including India, where it has a quarter of the browser market.
Google shares fell about 5% in after-hours trading.
To read the original article in Advertising Age, click here.
