Is Google struggling to get a grip on mobile advertising?
Google’s share price has suffered since announcing their Q3 results in which they missed their growth numbers. So has the challenge of reinventing its search business starting to show cracks in the eyes of investors?
One of the main concerns amongst investors is that Google core search business has suffered a 2% drop in cost per click revenue. Now this may seem ok considering volume rose by 17% compared to the same quarter last year but this was a drop from 25% from the previous quarter.
So the search business is starting to slow with the increasing use of mobile being cited as one of the reasons for this results. So why all the concern, it is not that this is all a big surprise.
Google has always stated that it will take some experimenting to work out the best way to generate revenue from mobile advertising and if there is one company on this planet that has the money to invest to get it right it is Google. So far they have invested $2.7 billion in research-and-development this year and mobile advertising would have to be getting its far share of this investment.
The recent results may be a concern for investors with a short term focus but for the masses this should be an acceptable challenge that Google is very well equipped to take on.
The only change you may see from the Internet giant driven by the markets reaction in the last week is an increased effort to tighten costs. Or then again with over $60 billion in cash reserves they may just keep charging ahead as planned.