Google Rides Ads, Apps to $17 Billion Revenue Quarter

Most of this success is based on continued good news in terms of its bread-and-butter business--attracting eyeballs for advertising purposes.

Google, with all of its acquisition moves, robot R&D, moonshot ideas and edgy Earthbound projects, above all knows how to run a successful business.

This is a company that went public in August 2004 at $85 per share and plainly knows how to make money in the new economy. The stock closed Jan. 30 up $28 on the day at $1,139, and then kept moving north to $1,182 in after-hours trading, up another $43.

The Mountain View, Calif.-based search and Web services giant revealed another stellar quarterly earnings report Jan. 30, totaling $16.9 billion--or $9.90 per share--in revenue versus $14.4 billion in the year-ago quarter. Profit was $3.4 billion compared with $2.9 billion in the fourth quarter of 2012.

About $10.55 billion of revenue emanated from Google’s sites and $3.52 billion from partner sites, Google said.

Most of this financial success is based on continued good news in terms of its bread-and-butter business--attracting eyeballs for advertising purposes. Paid clicks, which measure volume in Google's advertising businesses, were improved 31 percent over 2012, while the cost per click--a clear measure of the margin on its core business--fell 11 percent year over year.

CEO and co-founder Larry Page described the report as representing "great progress across a wide range of product improvements and business goals."

Application sales, mostly for games on mobile devices, and sales of devices were also important drivers. The pre-holiday release of the Nexus 5 tablet and strong demand for the Chromecast television dongle also made an impact.

"Revenue growth was driven by content and app sales in the Google Play store," Google CFO Patrick Pichette said on the conference call to analysts and journalists. "Play hardware sales drove a big chunk of quarter-over-quarter growth. Nexus 5 was very strong for us, and the Chromecast was a best seller all quarter."

Chromebook laptop sales were strong, but they did not contribute much to Google's bottom line. "Most Chromebooks are sold through third parties, so we don’t book revenue on them," Pichette said.

The sales of much of Motorola's mobile properties to China's Lenovo, the $3.2 billion acquisition of Nest Labs, a patent-license deal with Samsung, and the acquisition of artificial intelligence provider DeepMind all did not have a material effect on the fourth quarter of 2013 report but will figure prominently in the next one.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 13 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...