Google Q3 2013 Beats With $14.89 Billion But CPCs, Motorola Down

Google reported its third quarter earnings and revenues today. Total consolidated revenues (including Motorola) were $14.89 billion, which beat financial analysts’ estimates. Total revenues grew 6 percent over last quarter and 12 percent vs. 2012.

Screen Shot 2013-10-17 at 2.31.28 PM

Here are the revenue and segment highlights:

  • Google sites generated revenues of $9.39 billion, 68 percent of total Google segment revenues, a 22 percent increase over Q3 2012
  • Google’s network generated revenues of $3.15 billion, compared to $3.13 billion in 2012
  • Other revenues were $1.23 billion, an 85 percent increase vs. $666 million a year ago
  • International revenues were $7.67 billion (Google UK revenues were $1.39 billion)
  • Traffic acquisition costs totaled $2.97 billion, or 24 percent of ad revenues
  • Net income was $3.64 billion (Non-GAAP) on a GAAP basis it was $2.97 billion

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Aggregated paid clicks (Google sites + network) increased 26 percent vs. 2012 and 8 percent over the previous quarter.  However, average CPCs decreased 8 percent vs. 2012 and were off 4 percent vs. last quarter.

Once again, this is likely due to the continued migration of usage to mobile devices where CPCs are still lower. Enhanced campaigns is partly designed to equalize pricing across platforms.

Motorola Mobility brought in $1.18 billion (compared with $1.78 billion last year). However the division showed an operating loss of $248 million, compared to a loss of $192 million in 2012.

Motorola is closing in on a $1 billion annualized run rate loss for Google. However on the earnings call CFO Patrick Pichette shrugged it off. It’s still “early days” in Google’s control and transformation of Motorola, he said.

More data and detail are available in the full release.

Earnings call

Below are some highlights and excerpts from the earnings call. These are remarks made by the executives pictured immediately above, Google CEO Larry Page, CFO Patrick Pichette and SVP Nikesh Arora.

On Android:

Over 1 billion android devices have now been activated worldwide

On YouTube mobile traffic: 

Almost 40% of Youtube’s traffic now comes from mobile, up from 6% two years ago

Voice search:

We added four new languages this quarter making available on over 78 languages and accents

On the revenue impact of punishing bad ads:

The advertising policy decisions that we implemented earlier this year to ensure good user experience continued to negatively impact Google’s network revenue in the short term, and therefore our network revenue was in fact flat year-over-year to $3.1 billion and was down 1% quarter-over-quarter.

On selling content and “other” revenue:

Google’s other revenue grew 85% year-over-year to $1.2 billion and was up 18% quarter-over-quarter. Digital sales of apps and content in our Play store drove year-over-year and quarter-over-quarter growth in this line.

How many employees? 

46,000 full-time employees

Mobile and estimated total conversions: 

We’ve also launched cross device measurement tools and analytics. There are three observations here. First; mobile is driving higher online conversion. American Apparel found that mobile ads were actually driving 16% more conversions than they initially thought and as a result they’re now investing more to drive more sales. Second, mobile drives more phone calls. On average there are more than 40 million calls driven by Google ads every month, this is twice as much as it was a year ago. Third, mobile drives in-store traffic.

On selling products in the real world: 

We’re also rolling out unified Google experience in more than 750 Best Buy stores to showcase Chromebooks, Chromecast and the newest Nexus devices under our one Google branded design.

Related Topics: Channel: Industry | Google | Google: Business Issues | Top News


About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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  • Mobile

    Really the great innovative and leading gaint even the profit able gaint, is Google. it seems stable for millennium year..

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