UNDER PRESSURE: Google's revenue is lower, as more people access content on mobile devices where ad rates are lower.
Google Inc's revenue grew 15% in the fourth quarter but fell short of Wall Street's target on declining online ad prices and unfavorable foreign exchange rates.
Google's advertising revenue has come under pressure as more consumers access its online services on mobile devices such as smartphones and tablets, where ad rates are typically lower.
The growing popularity of mobile devices has made No. 1 social network Facebook Inc a greater threat in the battle for advertisers. Facebook reported that mobile ads on its network doubled year-over-year during the fourth quarter.
Google said the average price of its online ads, or "cost per click," decreased 3% year-over-year in the fourth quarter, while the number of consumer clicks on its ads increased 14%.
Some analysts had hoped for gains in cost-per-click, said BGC Partners analyst Colin Gillis, adding that the company, which gets about half of its revenue overseas, also was hurt by the strong dollar.
"Business is slowing. The core is slowing. And what we're saying is, it's going to look on paper even worse as the dollar strengthens. And we are not at that point where mobile monetisation is improving," he said. "The thesis that the landscape is changing and Google is missing out - I don't think it will hold to be true, but they haven't squelched it."
Consolidated revenue in the three months ended Dec 31 totaled US$18.1bil (RM65.6bil), compared to US$15.71bil (RM57bil) in the year-ago period. Analysts polled by Thomson Reuters I/B/E/S were looking for revenue of US$18.46bil (RM66.97bil).
Chief financial officer Patrick Pichette said in a statement that revenue grew "despite strong currency headwinds." — Reuters
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