Search advertising revenue is still Google’s dominant revenue stream. They did better than expected, with overall revenue climbing 23 percent and net income rising 32 percent. Smashing expectations from Wall Street analysts, Google’s stock price rose about 9 percent in after-hours trading. Their third-quarter results also contain some interesting numbers regarding mobile ads and display ads.
They’ve turned mobile ads into a $1 billion business worldwide (annualized based on the prior quarter.) This is only five months after Google started pushing AdMob, which it acquired late last year for $750 million. While AdMob was second in revenue last year, making less than $100 million, the acquisition puts Google at the number one spot with 21% market share.
“Clearly this is the future of search and the Internet.” — Jonathan Rosenberg, senior vice president of product management at Google
“Mobile is going to be an increasing part of the strategy in terms of sales.” — Google’s head of mobile advertising, Omar Hamoui
Display ads, ads with images and video, are set to generate more than $2.5 billion in revenue in the coming year. While $3.5 billion in revenue isn’t much compared to the $30 billion Google is expected to rake in, it still means they are having some success in new areas of business.
“What matters is how much longer can Google grow at 20 percent or more, which is considered rapid growth, double the rate of Internet advertising at this point,” Mr. Rohan said. If the company can continue to grow at that rate, he said, “it would suggest that they’ve extended gracefully into display and mobile.”
Part of Google’s success has been in mobile advertising and one major factor in that success is the Android platform. It’s the fastest growing mobile platform to date. They have multiple devices on every major carrier in all shapes and sizes. They are bringing smartphones to the masses while also make it easy for developers to market and monetize Apps in their Marketplace using, of course, Google’s own advertising platform.
In addition to getting the text and display ad game in check, they’ve also introduced features like Google Voice Actions to make it easier to search. Remember, every search means money for Google. Mobile won’t be enough to really make Google some cash. They’ll have to go after TV advertising as well, which is probably the reason behind Google TV. They haven’t said how they will monetize, but they aren’t bringing the web to your living room for nothing.