Home Mobile Ad Weakness Deflates Google Shares

Mobile Ad Weakness Deflates Google Shares

Microsoft isn’t the only one getting smacked around by Wall Street today—Google is getting the stink eye too after reporting their 2Q earnings and missing analysts’ marks, despite a 19% rise in revenue for the quarter.

Google shares were down as much as 5% in after-hour trading following a report of second-quarter net income of $3.23 billion compared with $2.79 billion a year ago. The overall revenue figure came in at $14.1 billion.

Analysts were looking for a net income figure of $3.6 billion and $14.4 billion in revenue for the quarter. And you know those analysts—even if you make some money, you miss their expectations, and boom, the hammer falls.

The main reason for Google’s perceived weakness: less-than-spectacular mobile ad sales, a perennial tough nut to crack. For Google, it’s a bit of a double whammy: there are signs that its desktop search business is slowing down, too.

Ads are regarded as a very soft form of revenue—subject to the whims of a fickle marketplace. And mobile ads are particularly hard because small screens and mobile use cases make them much less attractive to click. Mobile users, after all, are usually just that: mobile and in too much of a hurry to take time to click an ad.

Google’s revision of its AdWords program may help: the enhanced campaigns that have been optional since February and will be mandatory on July 22, requires ad buyers to purchase ads for desktop and mobile platforms. This will ultimately raise the prices on ads for smartphones and tablets, because there will automatically be more demand for ads on those platforms.

For all its innovations with Glass and self-driving cars, at the end of the day, Google is still an advertising company, and they will have to live and die by that soft market unless they can completely remake themselves someday.

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Get the biggest tech headlines of the day delivered to your inbox

    By signing up, you agree to our Terms and Privacy Policy. Unsubscribe anytime.

    Tech News

    Explore the latest in tech with our Tech News. We cut through the noise for concise, relevant updates, keeping you informed about the rapidly evolving tech landscape with curated content that separates signal from noise.

    In-Depth Tech Stories

    Explore tech impact in In-Depth Stories. Narrative data journalism offers comprehensive analyses, revealing stories behind data. Understand industry trends for a deeper perspective on tech's intricate relationships with society.

    Expert Reviews

    Empower decisions with Expert Reviews, merging industry expertise and insightful analysis. Delve into tech intricacies, get the best deals, and stay ahead with our trustworthy guide to navigating the ever-changing tech market.