Google hits record revenues of $50bn as UK business expands

UK revenues for the quarter ending 31 December 2012 climbed from $1.23bn in the previous quarter on the back of a stabilisation of its cost-per-click revenues.

On a year-on-year basis UK revenues increased by an impressive 23% in the fourth quarter of 2012, rising from $1.06bn in the final three months of 2011 to $1.30bn in the same period of 2012.

In its third quarter, Google reported its profits dropped 20% as a result of web traffic moving to mobile devices and the company completing the acquisition of the loss-making Motorola Mobility.

Mobile ads can cost marketers less than half as much as search ads on desktop PCs, meaning that the rise of mobile is impacting on Google’s business.

Google was boosted in the fourth quarter by the price of cost-per-click increasing by approximately 2% over the third quarter of 2012.

Nevertheless, the price of cost-per-click decreased by approximately 6% year on year in the fourth quarter of 2012.

However, this was a significant improvement on the third quarter, which saw average cost-per-click drop about 15% year on year.

Paid clicks increased by approximately 24% year on year in the fourth quarter and increased by around 9% over the third quarter.

Larry Page, chief executive at Google, said:  "We ended 2012 with a strong quarter. And we hit $50 billion in revenues for the first time last year – not a bad achievement in just a decade and a half.

"In today's multi­screen world we face tremendous opportunities as a technology company focused on user benefit."

The core Google internet business made revenues of $12.91bn (£8.14bn) in the fourth quarter of 2012, a 22% year-on-year increase.

Consistent with generally accepted accounting practices, Google reports its revenues on a gross basis, including traffic acquisition costs (TAC) or the cash shared with its partners. When TAC are stripped out, revenues were $9.83bn for the quarter.

This article was first published on mediaweek.co.uk