Google’s Disappointing Ad Business Shrinking the Revenues Continuously
Google’s Disappointing Ad Business Shrinking the Revenues ContinuouslyGoogle faces setback after the disappointing growth rate for Q1 2019, whereas 73 percent surge in growth has been noticed in the cloud business of Microsoft.
There has been $1 billion less revenue generated than it was expected by analysts, leading to a $60 billion loss in the market for the company.
The parent company of Google, Alphabet said that the expected earnings per share were $10.61 but it turned out to be $11.90. Refinitiv study expected the revenue to be $37.33 billion but it was $36.34 billion.
The expected traffic acquisition costs by FactSet was $7.26 billion whereas, it was $6.86 billion in real. The paid clicks on Google properties were +39 percent and the cost-per-click was -19 percent.
A year ago, the revenue growth was 28 percent which grew only 17 percent this time. There has been a downfall in rising of sales as well, 25 percent growth last year and now 15 percent rise was noticed.
Finance chief of Alphabet, Ruth Porat clarified that most of the upset has been majorly from the YouTube side. There have been various controversies revolving around YouTube, affecting its advertising business.
A 25% increase has been seen on Google’s ‘other revenues’ sources, making almost $5.45 billion.
The weakening ads business has drawn the attention of Google towards its hardware and cloud business to generate revenues. The company has decided to keep investing in capital expenditure, and side-by-side compete with Microsoft and Amazon.
For the two consecutive quarters, Google have faced downfall and continuous decrease in share prices.