Google's revenues climbed 17% in the final quarter of 2013, the company announced Thursday, but low-cost mobile ads chipped away at the price the tech giant commands for online ads.
The company's results came a day after it announced it was selling Motorola Mobile for a fraction of its purchase price. Google's consolidated revenue, which includes the money-losing Motorola smartphone business, rose to $16.86bn for the quarter from $14.42bn in the fourth quarter of 2012. Analysts polled by Thomson Reuters had expected $16.75bn. Profits rose 17% to $3.38bn, or $9.90 a share, up from $2.89bn, or $8.62 per share, for the same period last year.
“We ended 2013 with another great quarter of momentum and growth,” said Larry Page, chief executive of Google. “We made great progress across a wide range of product improvements and business goals. I'm also very excited about improving people's lives even more with continued hard work on our user experiences.”
Advertising revenues rose about 17% to $14.07bn from the year-earlier period. Paid clicks on Google's online ads jumped 31% year-on-year but the cost per ad clicked declined 11% from the year before and was 2% lower than the last quarter. The majority of revenues came from Google's own sites which include it search engine and YouTube. Google-owned sites generated revenues of $10.55bn, 67% of segment revenues,in the fourth quarter of 2013.
Revenue from the Motorola Mobility unit declined 24% to $1.15bn, while the operating loss for the business was $384m, up from $248m in the prior period.
Page announced the sale of Motorola Mobile to Lenovo on Wednesday for $2.9bn. The sale comes less two years after Google bought the the Moto X smartphone firm for $12.5bn, by far its largest-ever purchase.
Sales of the new Motorola phones have not been strong and shareholders have been unhappy about the division’s losses amid intense competition in the mobile hardware market.
On a conference call with analysts Patrick Pichette, Google's chief financial officer, described the sale as a “win-win”. He said the company had helped Google develop its Android mobile business. “We believe this is a great transaction where everybody wins,” he said.
Pichette reiterated comments first made by Page that the company remained committed to hardware. Google recently bought smart home appliance firm Nest and is developing a smart watch as well as Google Glass, its web-enabled eyewear.
