Google continues to make money - thanks to mobiles and YouTube

Although Google has traditionally pleased investors with consistent financial growth for quite some time, in the past two quarters, the company has not been up to Wall Street expectations. But as a result of the closure of the 2nd quarter of 2015, she was able to achieve significant success in correcting this situation. Reported revenues of $ 17.7 billion in the past quarter, which is an increase of 11 percent compared with last year and 3 percent compared with the first quarter of 2015. This far exceeded Wall Street’s expectations, and as a result, Google’s stock price rose 11 percent at the close of trading. What contributed to this success? According to Chief Financial Officer Ruth Porat, this was due to the success in the mobile sector, as well as the success of the YouTube project.





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Although Google does not intend to disclose specific figures, Poré said that “the gap between the mobile and desktop sectors continues to narrow,” when it comes to advertising money. Apparently, a particularly strong surge occurred in the field of mobile search, which makes a significant contribution to total advertising revenue. Omid Kordestani (Omid Kordestani), Chief Development Officer, commenting on financial indicators, said that "in 10 countries we received more search queries from mobile devices than from computers." That is why the company devotes even more resources to improving its mobile solutions. He said that about 30 percent of mobile searches were tied to a specific location — people want to know what is happening next to them and where the nearest gas station is located. “When people are looking for mobile phones, they want to receive current information and act immediately,” he said.



But it's not just about finding. Google has also invested in other key mobile destinations, especially where people are less inclined to contact the google.com search engine directly. Kordestani claims that their efforts in such projects as “Google Photos”, “Here and Now” and “Android Pay” have become the key to Google’s global presence in the world of mobile devices. He also noted the importance of strong application interconnectivity when users install new applications by reference to others already installed. This increases overall traffic. Poré said that Google Play "continues to grow at an impressive pace" and is becoming "the fastest growing mobile gaming platform."



What is particularly impressive is the fact that YouTube’s advertising revenue has also increased significantly, especially on mobile devices. The format of “TrueView” ads - first of all, all those pre-viewed ads that you see before clips on YouTube - have been growing significantly lately. It’s time to say that YouTube has grown at an accelerating pace of 16 percent, while "viewing time from mobile devices has more than doubled." Cost per click has decreased, but this is normal, as the number of clicks with the above-mentioned TrueView views has increased. The new function TrueView, when information on products and prices is automatically added to video ads, opens up opportunities for further growth.



Indeed, the number of advertisers using ads on YouTube has grown by 40 percent, and they have, on average, begun to spend 60 percent more money. Kordestani said that the average viewing time on YouTube was also more than 40 minutes, and that the public from 18 to 49 years old watches the video on YouTube on their mobile devices more than the video on cable television networks. He argues that YouTube is also a great place for content creators - the number of channels making six-digit numbers - has grown by 50 percent compared to the same period last year.



As for Google’s other projects — Nest, Fiber and Google Life Sciences — they are currently under “close attention” and are seen more as more long-term sources of income. This means that they are not really making any money now, but in the future such potential exists.



Sources:

www.engadget.com/2015/07/16/google-q2-2015