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The Scariest Thing About Google's Earnings
On Google's earnings call yesterday, some analysts honed in on a particular trend: declining cost-per-click rates, or CPCs.
Google's ad revenue is determined largely by two factors: the number of clicks on ads ("paid clicks") and how much advertisers pay for each click ("CPC"). The first number has been rising fast -- it was up 39% in Q1 of 2012, compared with the previous year.
But the second number has started to decline, and was down for the second consecutive quarter (as compared with a year ago).
Google said that the factors driving CPC are very complicated, and include foreign exchange rates, rising mobile usage of Google (where advertisers pay lower prices per click), faster growth in developing countries (where prices are lower), and changes in ad quality all have an effect.
Most analysts seem to agree that CPCs, taken in isolation, are not the best measure of Google's business. But if you're looking for a reason why the stock went down today, other than the new class of stock the company announced, this might be it. Read » | | | | | | | | | | | | | | | | | | | The email address for your subscription is: dwyld.kwu.jobhuntportal11@blogger.com
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