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"We completed another great quarter. Google's revenue was $15.4 billion, up 19% year on year", said Larry Page, CEO of Google. "We got lots of product improvements done, especially on mobile. I'm also excited with progress on our emerging businesses." Google Inc. First Quarter 2014 Results [investor.google.com]
Revenues and other information - Google Inc. revenues for the quarter ended March 31, 2014 were $15.42 billion, representing a 19% increase over first quarter of 2013 revenues of $12.95 billion.
Sites Revenues - Our sites generated revenues of $10.47 billion, or 68% of total revenues, in the first quarter of 2014. This represents a 21% increase over first quarter of 2013 sites revenues of $8.64 billion.
Network Revenues - Our partner sites generated revenues of $3.40 billion, or 22% of total revenues, in the first quarter of 2014. This represents a 4% increase over first quarter of 2013 network revenues of $3.26 billion.
Other Revenues - Other revenues were $1.55 billion, or 10% of total revenues, in the first quarter of 2014. This represents a 48% increase over first quarter of 2013 other revenues of $1.05 billion.
International Revenues - Our revenues from outside of the United States totaled $8.76 billion, representing 57% of total revenues in the first quarter of 2014, compared to 56% in the fourth quarter of 2013 and 55% in the first quarter of 2013.
Our revenues from the United Kingdom totaled $1.58 billion, representing 10% of total revenues in the first quarter of 2014, compared to 11% in the first quarter of 2013.
Paid Clicks - Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 26% over the first quarter of 2013 and decreased approximately 1% over the fourth quarter of 2013.
Cost-Per-Click - Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 9% over the first quarter of 2013 and remained constant from the fourth quarter of 2013.
TAC - Traffic acquisition costs, the portion of revenues shared with Google's partners, increased to $3.23 billion in the first quarter of 2014, compared to $2.96 billion in the first quarter of 2013. TAC as a percentage of advertising revenues was 23% in the first quarter of 2014, compared to 25% in the first quarter of 2013.
The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.39 billion in the first quarter of 2014. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $845 million in the first quarter of 2014.
Most of the concerns voiced by analysts on the conference call echoed those of the last few quarters. They included lower prices per click on search ads, due in part to the lower prices commanded by mobile ads; how new ad formats such as “product listing ads” and skippable video ads on YouTube are doing; and the impact on profit margins of investments in a blinding array of new businesses, from thermostat and smoke alarm maker Nest to so-called “moonshots” such as balloon- and drone-based Internet access, cloud computing, wearable computers such as Google Glass, robots, and of course self-driving cars. All of those new initiatives seem likely to be less profitable than its lucrative search ads.
I know it would only take a few college kids with enough energy and intelligence to write some code over a few weeks to demolish Google's supremacy at the ability to "organize world's information", but in a much more privacy-friendly way.
For all of the huge investments they have made the company is still a one trick pony. If search fails the company will fail.
Any company that hopes to unseat Google needs more than a good idea: It also needs a ton of money to invest in infrastructure.
It is no wonder that these guys, who are intelligent, well educated people who understand the realities of the business world, are rushing to diversify so quickly.