Google may be loosing on Motorola front, but it has figured out how to make more money as Web surfers migrate from personal computers to mobile devices. Google has released the first-quarter numbers on Thursday, which shows that Motorola Mobility’s operating loss in the first quarter was $ 271 million on revenue of $ 1.02 billion, the smallest setback so far. Motorola Mobility has lost $1.25 billion since Google took control.
Speaking at an event earlier this week, Eric Schmidt, executive chairman of Google, said: “What I would advise you to do with Motorola is wait and see for this next generation of technology. It’s very impressive.” In a conference call, Google noted that while it is “seeing a lot of progress across the board” with the transformation of Motorola, “results from that segment will continued to be variable”. Earlier this week Google completed the sale of Motorola’s Home business to Arris Group, which is active in the same space, for $2.2 billion in cash and shares equivalent to around 7.7 per cent of Arris.
Despite losses at Motorola, Google’s core “advertising and other” business, sales increased to $12.95 billion in the three months from $10.65 billion. On a group level, Google reported a profit of $3.35 billion, up from $2.89 billion, on revenue of $13.97 billion, up from $10.65 billion.
These results indicate that a recent decline in Google’s average ad prices is easing. That’s an indication that marketers are starting to pay more for the ads that Google distributes to smartphones and tablet computers. The company expects that trend to continue as it changes its pricing system and as mobile devices emerge as the most effective way to reach consumers.
During February 2013, the company launched “a significant upgrade to AdWords” called Enhanced Campaigns, which is designed to allow advertisers to offer campaigns across multiple device types, with material “dynamically adapted” by Google. “Online advertising has developed in a very device specific ways with separate campaigns for desktop and mobile. This makes arduous work for advertisers and agencies, and means mobile opportunities often get missed,” Larry Page, CEO of Google, said.
Because of strong quarterly result, Google Inc’s share price should resume its upward march to about $900 from less than $800 now, many analysts have predicted today.