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google
federal trade commission
cost of advertising
year one
mobile advertising
cost per click
smart phone
smart phones
Slump In Google Shares
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Slump In Google Shares

Google is in the news again, showing less than expected profits with shares dropping 8% on Thursday October 18, 2012. The early release of its earnings was probably also another negative, as investors and others in the stock market community were not expecting this release until later.

The drop appears to be associated with what was called a mobile transition. With the addition of more tablets and smart phones on the market its’ cost per click has declined since advertisers pay less for the ads on mobile devices than the ads that are on desktop computers.

Google’s cost per click has gone down 15% since last year and as mobile advertising costs continue to be lower than desktop advertising, analysts say this trend will continue. Also more and more new mobile devices are flooding the market which will contribute to this decrease. The number of clicks on Google ads has increased 33% over the last year.

One option would be to raise the cost of advertising on mobile devices, but this could drive away customers. Other incentives could be added, such as more ads on premium sites with a higher cost or any number of other benefits to attract customers to advertiser’s sites.

Google has been riding a bubble and now it may NOT be ready to pop, but it may be floating downward for a while until things are sorted out. As more users jump on the mobile wagon there will be more traffic from those that may have not wanted or could not buy a computer.

There are other problems as well. There is an antitrust issue that it is facing with the Federal Trade Commission and there are some questions about patents on smart phone technology and its’ Motorola subsidiary.

In Europe, it is facing threats from regulators about the way they are collecting and using personal data of its customers. European regulators are threatening to fine or take legal action against Google if it does not clarify how it is using customer data. This came on the wake of a change made in its’ privacy policy, which was claimed to be necessary to produce useful new products.

It is certain that Google will be around; it just has to travel over some bumps and move on down the road. After all, who could survive a day without being able to “Google” an answer for your knowledge base. There could not be an electronic world with out their search engine!


Street Talk

I agree, they will survive.

Reply
  about 6 years ago

Thanks for the comment Shawn!

Reply
  about 6 years ago

Nice article on Google stock !

Reply
  about 6 years ago

Thanks Eugene, it was an new story that caught my attention.

Reply
  about 6 years ago
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