Google gets it right, shares slip nine percent!

Alex Leslie - 20/01/12

Google missed financial analysts targets by a whisker and the company was punished with a nine percent drop in its share price. This says more about the markets than about the strength of a company that, like it or hate it, still manages to innovate while still being an insanely huge company.

Apart from stripping out businesses and initiatives that are not performing Google ‘suffered’ from a drop in ad prices. This resulted in the mauling. Larry Page, CEO of Google was obviously depressed by the results (not), when he said “I am super excited about the growth of Android, Gmail, and Google.”

Google is simply limbering up for the biggest shift that our culture has seen in recent years, possibly decades – mobile advertising. For Google alone, revenue from mobile advertising grew from $1 billion in 2010, to over $2 billion in 2011 and should hit $4 billion this year. Not something to be too depressed about.

The fact that cost per click dipped 5% in the fourth quarter of 2011, because of the rise of competition in mobile advertising, is surely testament to the fact that it is the way forward. Mobile advertising is getting ready for some serious competition – and therefore investment and therefore creativity and innovation. Mobile could well account for almost a quarter of paid clicks by the end of 2012, according to research.

Evidence of the success of online trends are generally best found in adult content or gambling and Adultmoda, a UK adult mobile ad network, pushed its monthly traffic to a new record at the end of 2011. The number of ads served doubled between August and December, hitting 10 billion in November.

Now that tablets have arrived and are seriously driving mobile usage, it is predicted that they will account for 50% of mobile search spend and 50% of click share. Facebook is enabling brands to attract ‘fans’ at unprecedented rates and Bing and Yahoo are not lying down, with both seeing good, solid growth.

The game is on and the first evidence is in. The jury of the financial community has found Google guilty of posting unexpected, rather than bad, results – thus spoiling their lunch – while the rest of us have examined the same evidence and concluded that a titan stripping down for action is actually a sign of a heroic and exciting battle to come. Super excited Larry Page is certainly ready for the fray.