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<h1 style="margin-bottom:2px">
<span id="ctl00_ContentPlaceHolder1_news_title">Google breaks the $50bn revenue barrier</span></h1>
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<a id="ctl00_ContentPlaceHolder1_authorlab" href="http://www.telecomtv.com/go/?ct=9&id=e9381817-0593-417a-8639-c4c53e2a2a10">TelecomTV One</a>
,
<span id="ctl00_ContentPlaceHolder1_posted">23 January 2013</span>
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<i><a href="http://www.telecomtv.com/results.aspx?tag=122&tagname=Google" class="taglink">Google</a></i> <i><a href="http://www.telecomtv.com/results.aspx?tag=6265&tagname=financial" class="taglink">financial</a></i> <i><a href="http://www.telecomtv.com/results.aspx?tag=117&tagname=Motorola" class="taglink">Motorola</a></i> <i><a href="http://www.telecomtv.com/results.aspx?tag=1812&tagname=Advertising" class="taglink">Advertising</a></i> <i><a href="http://www.telecomtv.com/results.aspx?tag=348&tagname=mobile" class="taglink">mobile</a></i> <i><a href="http://www.telecomtv.com/results.aspx?tag=879&tagname=search" class="taglink">search</a></i> <i><a href="http://www.telecomtv.com/results.aspx?tag=6972&tagname=corporate" class="taglink">corporate</a></i>
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<p>
<span id="ctl00_ContentPlaceHolder1_Subtitle">Fourth
quarter and full year results from Google showed that the company is in
good shape, with a significant increase in revenue and a more modest
rise in income. But advertising acquisition costs are on the up and
Motorola continues to disappoint. Guy Daniels reports.</span></p>
</div>
<p>
</p><p>
Google yesterday published its financial results for the fourth quarter
of 2012 and full year performance. The search giant reported
consolidated revenues of $14.4bn for the fourth quarter ended December
31, 2012. However, its traffic acquisition costs (advertising revenues
are reported gross without deducting this) for the period were $3.1bn,
equivalent to 25 per cent of advertising revenue.</p>
<p>
</p>
<p>
In other words, advertising netted the company $12.9bn. The remaining
$1.5bn of revenue came from Motorola (which Google acquired in late 2011
for the princely sum of $12.5bn). Mind you, the Motorola business also
cost Google $1.3bn – in all, Google reported a $152m quarterly loss from
Motorola Mobile.</p>
<p>
</p>
<p>
Of Google’s quarterly $12.9bn of advertising revenues, $8.6bn of this
came from Google-owned websites, $3.4bn came from partner websites
(so-called ‘network revenue’), whilst the remaining $829m are listed
simple as “other”.</p>
<p>
</p>
<p>
Google reported that 54 per cent ($6.9bn) of its total revenue now
comes from outside the US, which is up slightly from 53 per cent in Q4
last year. The UK is its largest overseas territory for deriving
revenue, with a reported $1.3bn or 10 per cent of the total. Mind you,
regular readers will know all about Google’s highly <a href="http://www.telecomtv.com/comspace_newsDetail.aspx?n=49763&id=e9381817-0593-417a-8639-c4c53e2a2a10">controversial</a> and ethically <a href="http://www.telecomtv.com/comspace_newsDetail.aspx?n=49775&id=e9381817-0593-417a-8639-c4c53e2a2a10">dubious</a>
“double Irish Dutch sandwich” corporate tax mitigation scheme for
maximising its profit… Not surprisingly, there was no mention of this in
yesterday’s news.
</p><div style="text-align:center;margin-top:15px;margin-bottom:10px">
<div style="color:grey;font-size:10px"></div>
</div>
However, it did state “our effective tax rate was 18 per cent for the fourth quarter of 2012”.
<p> Drilling down into more specifics, Google gave some details as to the
make up of its advertising revenues. Aggregate paid clicks, which
include clicks related to ads served on Google sites and the sites of
its network members, increased by 24 per cent over the fourth quarter of
2011. Average cost-per-click decreased approximately 6 per cent
year-on-year.</p>
<p>
Traffic acquisition costs (as previously mentioned) increased by 25 per
cent from Q4 2011. Google says the majority of this is related to
amounts paid to its network members, as well as to “certain distribution
partners and others who direct traffic to our website”. Nice and
cryptic.</p>
<p>
Net income in Q4 for Google as a whole was $2.9bn, up from the reported
$2.7bn in Q4 2011. For the year as a whole, Google reported unaudited
total revenues of $50.2bn and net income of $10.7bn – significantly
higher than 2011’s full year results of $37.9bn revenue and $9.7bn net
income. Google’s CEO Larry Page said that his company ended 2012 with a
strong quarter:</p>
<p style="margin-left:40px">
<cite>“Revenues were up 36 per cent year-on-year, and 8 per cent
quarter-on-quarter. And we hit $50bn in revenues for the first time last
year – not a bad achievement in just a decade and a half. In today’s
multi-screen world we face tremendous opportunities as a technology
company focused on user benefit. It’s an incredibly exciting time to be
at Google.”</cite></p>
<p>
Finally, Google reported free cash of $48.1bn and a total worldwide
headcount of 53,861 full-time employees (11,113 of which are currently
part of Motorola Mobile). Google also notes that its December agreement
with Arris Group to sell the Motorola Home business should net the firm
around $2.35bn when it completes later this year.</p>Ends<br clear="all"><br>-- <br><div>Salanieta Tamanikaiwaimaro aka Sala</div><div>P.O. Box 17862</div><div>Suva</div><div>Fiji</div><div><br></div><div>Twitter: @SalanietaT</div>
<div>Skype:Salanieta.Tamanikaiwaimaro</div><div>Tel: +679 3544828</div><div>Fiji Cell: +679 998 2851</div><div><br></div><div> </div><div><font color="#222222" face="arial, sans-serif"><span style="line-height:16px"><br></span></font></div>