Critics have been predicting the slow death of internet advertising for a long time. Google have made great strides into other areas, but still rely heavily on the foundation they sprang from. However there are no worries about profits sliding as Google revealed yet another quarter of great financial results.
Advertising is still the crutch that keeps everything up, however. Accounting for 90% of revenue, which rose again by a huge 22% to $15.9 from $13.1bn this time last year. Leading to an impressive rise of 5.9% in overall net profit of $3.4 compared to $3.2bn last year.
This is all with Google making great expenditure for its developers conference, as well as plowing money into improving its data centre capacity and efficiency. Advertising really is what Google does best.
In true advertising style, Google also went into to detail about its paid clicks. Showing again that predictions of a decline in internet advertising effects are wrong, Ad Word advertising clicks rose 25 percent, while clicks in Google services advertising increased 33 percent. This means if you want to spend money advertising with Google, think about doing so through Maps and Gmail.
“Google had a great quarter with revenue up 22 percent year on year, at $16 billion, We are moving forward with great product momentum and are excited to continue providing amazing user experiences, with a view to the long term.” Patrick Pichette, CFO of Google.
What has shown to be in slow decline is the amount of money that Google receives from those advertising clicks. So although there is more clicking, the overall income from one click has dropped 6% compared to 2013.
It is unknown what revenue Google receives from content delivery, but with the play store now well past a billion downloads and over a billion active users of Android, the income generated may now be significant. With subscription service Google Music and an on demand movie service, Google is prepared to supplement its income come the predicted decline of advertising.
One direction is increasing the inventory of hardware supplied directly from Google through Google Play. The inclusion of Nest thermostats alongside the Nexus and Google Play handsets. As well as eventually the subscription services from Dropcam will help tremendously.
Whats next for Google? Who knows. Do you have any predictions? Share them with us in the comments section below, on Facebook, Google+, and Twitter!