Google recently announced its Q2 earnings result, reporting a revenue of $14.11 billion, a hike of 19% over the previous year second quarter. The majority of the revenue came from advertising and web services as always. While, Motorola, the subsidiary of Google, reported an operating loss of $342 million.
With Wall Street analysts estimating a revenue of $14.45 billion for Google Q2, the drop is said to be due the falling mobile search ad prices. The overall ad prices dropped around 6% in the quarter as compared to previous 2% in Q1 this year. Also, there is increase in traffic acquisition cost (TAC) to $3.01 billion, as compared to $2.60 billion in Q2, 2012, which can be considered as another factor.
The Motorola acquisition for $12.5 billion is also not proving its worth for Google as seen from its Q2 results. The wireless subsidiary reported revenue of $998 million but spent more money than it brought in.
However, Google does not seem to be troubled by Motorola loss as revealed by the Google CFO Patrick Pichette statement during the company’s Q2 earnings release call. “You have to put the acquisition in context. I’ll leave it to the coming quarters to demonstrate the new Motorola that’s coming up. You’ll see that in the coming weeks, actually”.
As per the reports, Motorola might have two major announcements next week that could bring in focus, the company’s potential towards growth with Google.
The other details from the report and the earnings call include:
1) Paid clicks increased approximately 23% over the second quarter of 2012.
2) Non-ad revenues such as Google Apps contracts with businesses, schools, and governments, as well as app sales, 138%, to comprise 8% of Google’s revenues.
3) Networks revenue growth decline to 7% growth in Q2 vs. 12% in Q1.
4) Site revenues increase 18% as compared to Q2, FY13.
5) In Q2 FY13, around 900 million Android devices have been estimated to get activated worldwide.
6) Google play store saw download of more than 15 billion apps in Q2.
7) The Google web browser, Chrome reported 750 million users worldwide.
Google also made the launch of several new projects such as Project Loon, Google fiber and tools like Person finding tool, new Gmail version to improve ads targeting and conversion on Gmail.
The Q2 FY13, also saw the acquisition of Waze, the Israel based mapping software company, by Google in a billion dollar deal.
During the second quarter 2013 earnings release call, the Google CEO Larry Page also mentioned about the soon to be launched Signature Smartphone, with name still undisclosed.
When asked by Forbes correspondent about the new upcoming innovations, he mentioned about having them over long term and also made a word regarding Google Glass. However, he does not include anything regarding Google entry into Smartwatch segment.
Few days back Eric Schmidt, Chairman, Google was caught using a latest motorola phone, MotoX hinting about the activity under motorola. Thus, with the ownership of Motorola’s SmartWatch MotoACTV, Google can be expected to deploy Motorola to reach Google’s ambitions of being a leader in the smartwatch category.