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Google Inc. (NASDAQ: GOOG, GOOGL) today announced financial results for the quarter ended March 31, 2015.
“Google’s first quarter revenue was $17.3 billion, up 12% year on year. Excluding the net impact of foreign currency headwinds, revenue grew a healthy 17% year on year,” said Patrick Pichette, CFO of Google. “We continue to see great momentum in our mobile advertising business and opportunities with brand advertisers.” Google Inc. Q1, 2015 Results, Revenue was $17.3 billion [investor.google.com]
Cost per click, a measure of what advertisers pay when people click on Google ads, fell 7% from a year earlier. Google Caps Costs as Growth Slows [wsj.com]
If it weren’t for the dollar’s rising value, Google said revenue would have grown 17%. The company generates more than 55% of its revenue outside the U.S.; those sales translate into fewer dollars as the value of the currency rises relative to others.
Looks like even though they get 12% more clicks from publishers and make more money from those, they pay about 26% less to publishers.
I'm sceptical about that graph. When I read the Google Report, I see +12% in number of clicks from partner websites. Not -12%. Look at the yellow table here:
The parentheses in financial reports indicate a negative number.
Something does not add up. They got 12% less clicks from partner sites, but made more money from that?
Network paid clicks were down 12% year-over-year and up 4% quarter-over-quarter, and network CPCs were up 2% year-over-year and down 11% quarter-over-quarter. As you know, we don't usually break down the impact of the individual factors on the quarterly changes in our clicks and CPCs. But this quarter, I want to provide more color...
So many commentators are incorrectly assuming that the growth trends in our sites, clicks, and CPCs are primarily due to difficulties monetizing search on Mobile, but that's in fact not the case. Remember that sites metrics includes clicks and revenues related to ads served and Google's and on properties, most notably, obviously, Google.com, but as well as YouTube, engagement ads like TrueView, where users choice not to skip an ad is counted as a click.
The way I read the reports, they paid almost 100% in 2014-Q1. And dropped it to 68% in 2015-Q1. So that is a drop of about 30%.
What I find interesting is that Google pays way less for these clicks now:
2014 Q1: [investor.google.com...]
$3.23 billion paid to partners. $3.4 billion revenue from that traffic.
2015 Q1: [investor.google.com...]
$2.39 billion paid to partners. $3.58 billion revenue from that traffic.
The company generates more than 55% of its revenue outside the U.S