GOOGLE INC. (Nasdaq symbol GOOG; www.google.com) is the world’s top Internet search engine, with about two-thirds of this market. It makes money by selling advertising on its websites. Google charges advertisers every time a user clicks on one of their ads. The company gets 93% of its revenue from advertising.
In the three months ended June 30, 2013, Google’s revenue rose 19.5%, to $14.1 billion from $11.8 billion a year earlier. The company’s Android software powers 70% of the world’s mobile devices. That’s helping drive more traffic to its websites: paid clicks jumped 23% in the quarter.
However, advertisers pay lower rates for mobile ads because they are more difficult to see on mobile devices’ smaller screens. As a result, the average cost per click fell 6%.
Tech stocks: Google continues to invest steadily in new products
Earnings fell 3.8%, to $3.2 billion from $3.4 billion. Earnings per share declined 5.9%, to $9.56 from $10.16, on more shares outstanding. That’s mainly because Google continues to invest in new products, such as upgraded smartphones from its Motorola Mobility subsidiary. Motorola Mobility is also developing new low-cost mobile phones and tablet computers for emerging markets
The company also spent $2.0 billion (or 14.1% of revenue) on research, up 29.2% from $1.5 billion (or 13.0% of revenue).
The stock trades at 23.4 times Google’s projected 2013 earnings of $38.60 a share. The company also holds cash of $54.4 billion, or $163.39 a share. Its long-term debt is $2.0 billion.
In the latest edition of Wall Street Stock Forecaster, we look at Google’s launch of a new way of selling ads for both computers and mobile devices and whether it will increase its ad rates. We conclude with our clear buy-hold-sell advice on the stock.
Speaking of Google….here’s a note to readers with a Gmail account: Those of you who receive our TSI Network emails on Gmail have seen changes to your Gmail inbox recently. You now have 3 inboxes for Primary, Social and Promotional emails—and your TSI Network emails may be getting shunted into the Promotions inbox.
Here’s how you can have all of your TSI Network emails go directly to your Primary inbox.
All you need to do is drag and drop one of our emails from the Promotions inbox to the Primary inbox. You will see a notice in a yellow box asking you if you want to have all of your future emails from pat@tsinetwork.ca delivered to your Primary inbox. Click “Yes” and all of your future TSI Network emails will land in your Primary inbox.
COMMENTS PLEASE—Share your investment experience and opinions with fellow TSINetwork.ca members
Facebook’s stock revived, at least temporarily, on news that its ad revenue for mobile devices had shot up, and Google is trying to increase its sales in the same area. Between PVRs and mobile devices, do you think the impact of TV commercials is bound to decline? How effective do you thinks ads on mobile devices are? Do you pay attention to them? Let us know what you think.
Comments
Bruce
Thank you for the tip concerning drag and drop with the new Google e-mail. That’s what I call value-added from your newsletter. Cheers!
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Thank you for the tip concerning drag and drop with the new Google e-mail. That’s what I call value-added from your newsletter. Cheers!