Fourth-quarter revenue of Google misses Wall Street target

Fourth-quarter revenue of Google misses Wall Street target

In the fourth quarter, the revenue of Google Inc. grew by 15%, still it was not able to meet the Wall Street's target in context of declining online ad prices and unfavorable foreign exchange rates. A direct effect of the announcement was visible in shares of the company. The shares of Google edged up 0.1% to $510.66 in extended trading after an initial dip on the news.

The advertising revenue of Google has come under pressure in the recent times as more consumers are now accessing its online services on mobile devices such as smartphones and tablets and the ad rates in these areas are typically lower.

Facebook Inc is the number one social network site and the growing popularity of mobile devices has made it the greater threat in the battle for advertisers. An example of it could be visible in the announcement made on Wednesday by Facebook where it reported that mobile ads on its network doubled year-over-year during the fourth quarter.

On Thursday, Google said the average price of its online ads or the "cost per click," decreased 3% year-over-year in the fourth quarter at the same time the number of consumer clicks on its ads has increased by 14%.

Speaking in this context, BGC Partners analyst Colin Gillis is one of the analysts who had hoped for gains in cost-per-click. He added that the company which gets about half of its revenue overseas was also hurt by the strong dollar.

Colin Gillis said, "Business is slowing. The core is slowing. And what we're saying is it's going to look on paper even worse as the dollar strengthens. And we are not at that point where mobile monetization is improving. The thesis is that the landscape is changing and Google is missing out".


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