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Google's third-quarter profit nearly doubled from a year ago as sales of keyword-related advertising continued to grow for the world's top Web search engine.
"Business is very, very good here at Google. We had an excellent quarter in all respects, especially in international," Google Chief Executive Eric Schmidt said in a conference call Thursday after the results were released. During the quarter, Google saw strong user growth and improvements in search quality and ad sales, Schmidt said.
The news sent Google's stock up shares rising nearly 8 percent to $459.51 in after-hours trade, after closing at $426.06. The earnings announcement was made right after the market closed.
Google Q3 Profit Nearly Doubles [news.zdnet.com]
"Our third quarter results are a testament to the strength of our network of advertisers and partners, as well as our continuing focus on users," said Eric Schmidt, CEO of Google. "We were particularly pleased with the contributions of our international business in a seasonally weaker quarter. In addition, we continued to forge significant partnerships with companies such as eBay, Fox Interactive Media, and Intuit that will be of great value to all involved."
[edited by: engine at 7:59 am (utc) on Oct. 20, 2006]
Just checked some adwords stats and our cost in september 2006 is about 7x higher than in 2005.
september 2005 clicks: 15k
september 2005 impressions: 79 million
september 2006 clicks: 20k
september 2006 impressions: 70 million
5k more clicks, 9 million less impressions, result? More than 7x more this year. Much higher cost per conversion.
I give Google, say another 2-3 years before completely milking their advertisers out of the market.
Google's AdSense programs generated revenues of $1.04 billion, or 39% of total revenues, a 54% increase over network revenues of $675 million generated in 3Q 2005 and a 4% increase over 2Q 2006 revenues of $997 million.
As long as the PPC market doesn't have a decent alternative that offers some scale, G will continue to have its way. Sux for advertisers, but to the victor go the spoils.
You think the CPA (cost per acquisition) of a new customer is big online? Try some offline marketing, then we'll see who's crying. lmao!
You had a good thing with Adwords while it lasted; it was very, very cheap. Now, while I don't agree that Google should be jacking up prices for whatever reason they somehow magically come up with in their minds, I say, welcome to the real world of advertising. Customer acquisition can be expensive, just make sure you're offering enough 'back-end' products to make sure you get as much lifetime customer value (LCV) as possible.
Bottom line: did the cost to bring in a new customer (CPA) meet or exceed what they paid back to you as a customer? If they did, then Adwords worked for you, bottom line..
(And here's an innovative strategy for making up the increased cost in Adwords: Whenever GOOG increases Adwords prices, buy GOOG stock. Increased Adwords prices=increased stock price. Whatever extra money you had to pay in Adwords will be more than made up for from buying the increased GOOG stock. A few weeks ago I bought heavy GOOG and today I'm up 45.24%... Adwords going up? So is GOOG stock ;)
p.s. The preceding was not a suggestion to buy or sell stock, I'm not a broker, get competent advice and don't sue me when my 'innovative strategy' flops ;D
I wonder how much of a concern that is at the 'plex (if at all)!
Another interesting note is that the percentage of total advertising revenues from "Network Sites" slipped 5% (over YTD in '05 and '06). If that continues, it is logical to assume that less attention would be paid to those programs (even though the overall revenue generated by Network Sites increased).
Interesting stuff there indeed! Game on!
[edited by: Chico_Loco at 5:10 am (utc) on Oct. 22, 2006]