Google Q2 Earnings: Bad For Publishers, Good For Advertisers And Google Self ?

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On May 22 of this year, Google finally succeeded to acquire Motorola Mobility. Recently, it has lunched its Nexus 7 Inch Tablet and this time, it’s trying to create a hardware-software integrated mobile ecosystem. Today, Google has released its Q2 financial earnings ended June 30 of this year, recorded 21% year-over-year revenue growth. This time, Google has also included Motorola Mobility’s operating earnings for the second quarter of this year.

Google’s Q2,2012  Earnings

Google has reported a consolidated revenue of $12.21 billion for Q2 of this year, up 35% compare to the same quarter of the prior year. In Q2 of this year, traffic acquisition costs (TAC) accounted $2.60 billion revenue, which is 25% of total advertising revenue for the quarter. Google has reported operating income, operating margin, net income and earnings per share (EPS) on the basis of GAPP and non-GAAP for Q2 of this year.

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Income On The Basis Of GAAP

Google’s operating income in Q2 of this year on the GAAP basis was $3.20 billion, equivalent to 26% of total revenue. However, its GAAP operating income in the same quarter of the last year was $2.88 billion, which was 32% of the total revenue. GAAP net income in Q2 of this year was $2.79 billion, up from $2.51 billion in the same quarter of the prior year. On the other hand, GAAP earnings per share in the Q2, 2012 was $8.42 on 331 million diluted shares, up from $7.68 on 326 million diluted shares in the second quarter of 2011.

Non-GAAP Incomes

Likewise, non-GAAP operating income of Google in the second quarter of this year was $3.95 billion, which was 32% of its total revenues. However, its non-GAAP operating income in the Q2 of the last year was $3.32 billion, equivalent to 37% of total revenue. The search engine giant has reported non-GAAP net income $3.35 billion for Q2 of this year, surge from $2.85 billion in the same  quarter of the last year, while non-GAAP earnings per share (EPS) in the second quarter of Q2 of this year was $10.12 compared to $8.74 in the same quarter of the prior year.

Google’s Revenue From Advertisements And Other Sources

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Google revenue from advertisement and other accounted $10.96 billion for the Q2 of this year, which was 90% of consolidated revenue. The search engine giant has reported 21% revenue (from advertisement and others) growth in Q2 of this year compare to the same quarter of the prior year. Google-owned sites contributed $7.54 billion revenue in Q2 of this year, equivalent to 69% of total revenue, shown 21% growth compare to the same quarter of the last year, whereas Google’s partner sites accounted $2.98 billion revenue (27% of total revenue) in Q2 of 2012, shown 20% Y/Y growth.  Google revenue from outside the U.S. was $5.96 billion (54% of total revenue).

Besides, paid clicks (clicks related to ads served on Google sites and its partners sites) soared by 42% in Q2 of this year compare to the same quarter of the last year, up 1% compare to Q1 of this year, whereas an average cost per click (clicks related to ads served on Google and its partners sites) decreased by 16% in Q2 of this year compare to the same quarter of the last year, but up by 1% from the Q1 of this year.In addition to these, traffic acquisition cost (the portion of the revenue shared with Google’s partners) surged to $2.60 billion in second Q2 of this year from $2.11 billion in the same quarter a year back.

Motorola Mobility Earnings

In Q2, 2012, Motorola Mobility (hardware and others) contributed $1.25 billion revenue. Mobile segment of the company accounted $843 million revenue for the quarter, whereas home segment registered revenue of $407 million in Q2 of this year. However, GAAP operating loss for Motorola Mobility was $233 million for the quarter— mobile segment accounted $192 million while home segment registered $41 million. On the other hand, non-GAAP operating loss for Motorola in the second quarter was $38 million.

Clearly, it’s important to elaborate Motorola Mobility contribution to Google in the Q2 of this year. Undoubtedly, Google’s $12.5 billion acquisition of Motorola Mobility seems meaningful this time, not only in the sense that the search engine giant will leverage over its 17,000 patents but also, in order to create hardware-software integrated ecosystem.

Source: Google

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