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Google's Q2 Revenue Up 35%, Thanks in Part to Motorola
Google's Q2 Revenue Up 35%, Thanks in Part to Motorola
By Mark Long / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
JULY
22
2012

Google said Thursday that the company's revenue in the second quarter grew 35 percent year-over-year to $12.2 billion and rose 15 percent in comparison with the prior three-month period -- boosted in part by the contribution of revenue from the company's new Motorola Mobility business.

Minus Motorola's contribution, Google's revenue rose 21 percent year-over-year, but only grew 3 percent in comparison with the company's revenue in the first quarter of 2012.

Google did not complete its acquisition of Motorola Mobility until May 22, so the company's new Relevant Products/Services division only made a partial contribution to Google's latest quarterly results, Google CFO Patrick Pichette told investors on Thursday. During this so-called "stub period," Pichette said, Motorola generated $1.3 billion in revenue overall.

"Our mobile devices revenue for that period was $843 million, encouraged by the strength of the North American Verizon franchise driven by the RAZR MAXX sales," Pichette said. On the other hand, Google also saw "weaker revenues driven by the declining international sales of feature phones and mid-tier smartphones."

A Mobile Search Boost

Due to the recent closing of the Motorola acquisition, Pichette cautioned investors to expect "some accounting variability" going forward with respect to Google's new mobile device segment. The company is evaluating every business segment it has inherited from the Motorola Mobility deal.

"Clearly, everybody should expect some changes at Motorola," Pichette said.

Still, Google is now more active on the hardware side than at any other time in the company's history. Beyond its addition of Motorola, Google clearly has high hopes for the recently released Nexus 7 tablet that the company built in partnership with Asus.

"We launched a bunch of exciting new products at I/O -- in particular the Nexus 7 tablet, which has received rave reviews," said Google CEO Larry Page in a statement. "This quarter is also special because Motorola is now part of the Google family, and we're excited about the potential to build great devices for users."

With respect to the company's performance in this year's second quarter, however, the good news for Google was that the Android platform overall -- as well as the company's growing presence on mobile devices running rival Apple's iOS -- helped to spur Google search engine usage.

"We're seeing phenomenal growth in the mobile queries across the board -- whether it's tablets, whether it's mobile phones [or] whether it's geographical," said Google Senior Vice President Nikesh Arora.

Mobile Ad Gains

Google's mobile advertising platform also generated significantly more mobile ad revenues across the both Android and iOS platforms in the quarter in comparison with the same period last year.

"Mobile-friendly Web sites are vital to modern businesses and very important for our mobile search business," Arora told investors Thursday. "In less than one year the number of advertisers with mobile sites has doubled."

During the quarter, Google integrated its formerly separate AdMob and AdWords platforms to give the company's 1 million advertisers access to 300,000 mobile apps running on 350 million mobile devices.

"This has further turbocharged our ability to provide in-house advertising," Arora said. "We've had 15 million monthly calls for our click-to-call go format exclusively available in mobile devices in the U.S."

To further boost the mobile side of its business, the company has redesigned its Google+ app for both smartphones and tablets running Android and iOS.

"More users are now accessing Google+ from mobile devices than from desktops," said Google Senior Vice President Susan Wojcicki.

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