Google disappoints investors as advert rates decline

Google's shares have declined over concerns
that its advertising rates are declining despite
posting higher overall revenues.
Google on Thursday, reported consolidated
revenues of $15.42bn for the quarter ended
March 31, 2014, an increase of 19 per cent
compared to the first quarter of 2013.
Profits were also up by three per cent to
$3.45bn.
However, the cost per click on its advertising
fell by nine per cent, meaning the company
has to drive more clicks and more page traffic
just to stand still, let alone increase revenues.
As the company is heavily dependent on
offering advertising funded services as cost-
free to the consumer, the advert click
revenues are a critical measure of
performance.
Much of the decline can be put down to
increase use of mobile devices, which tend to
pay far lower rates than desktop adverts.
Google is particularly exposed to that decline
as it is the main backer of the Android
Operating Sysyem, and earns revenue when its
owns web services are included within the
handsets.
Had it been presented as an operating
segment, the Motorola Mobile segment
revenue for the first quarter of 2014 would
have been $1.45bn, $74m higher than what
was included in net loss from discontinued
operations.
The company ended the quarter with just
under $60bn of cash in the bank.