Google reports strong revenue backed by higher online advertisement sales
Search engine major Google has reported strong revenue for its online advertising business. The company reported growth in net income despite the strength in US dollar. Advertising volume recorded 13 percent growth, offsetting the 7 percent reduction in cost per click. Nearly half of Google’s revenue comes from overseas business and strong US dollar had an impact on its earnings.
After Google announced quarterly results, the stock jumped by 3.5 percent during the extended trading hours to $577. Google also reported higher expenses during the quarter. However, compared to last year, Google has managed its expenses. During the last quarter, expenses grew by 21 percent to $6.46 billion compared to 35 percent increase during Q12014. Google has also witnessed stronger advertising revenue from its video sharing platform YouTube.
The revenue reported by Google during the quarter was slightly lower than analyst estimates. Google registered $17.26 billion revenue during first quarter 2015 compared to $15.42 billion during the same quarter last year.
Google reported net income of $3.59 billion ($5.2 per share) compared to $3.45 billion during the same quarter last year.
Over the last few quarters, the share of web browsing on mobile devices has increased. Typically, the advertising revenue generated on mobile devices is less than desktop. Recently, Google announced changes in its search rankings for websites that are mobile-friendly.
Earlier this week, Google launched wireless service “Project Fi”. The company offers low cost internet access to smartphone users in collaboration with T-Mobile and Sprint. The service is available only on Nexus 6 handsets at the moment.
Google Chief Financial Officer Patrick Pichette said, "Excluding the net impact of foreign currency headwinds, revenue grew a healthy 17 percent year on year. We are experiencing real strength in mobile search.”
Market analysts consider Google results as positive for the long term and most of the analysts are confident that Google will continue to outperform in desktop search and mobile search space.
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