April 16, 2014 was a gloomy day for Google and its investors. Stock prices dipped three percent in after-hours trading.
This is the first time this quarter that earnings and sales alike fell short of expectations. The biggest concern was the massive nine percent loss in payments that came from marketers per ad on the many Google sites.
Google is charged with encouraging marketers to pony up cash for mobile ads just like they do for desktop ads, but that’s been a tough sell.
It’s no secret that mobile users have outpaced desktop users recently, but for some reason marketers haven’t been willing to make that jump with them just yet. With so many expert marketing agencies Google has to woo, Chief Business Officer of the tech giant, Nikesh Arora, says that “The journey is just beginning for advertisers on the mobile side.”
As retailers scramble to play catch-up and incorporate responsive design to make themselves mobile-friendly, ads get moved to the back burner.
Google’s clock is ticking
That’s an understandable conundrum, but it does nothing to support Google’s stock values. Arora notes, “Right now, we can lead the horse to water, but we can’t make it drink.”
The company is pushing an enhanced campaign that debuted in 2013, and centers on making advertisers purchase across multiple platforms. But it hasn’t been the segue piece that Google had hoped would take off.
But the picture is not all doom and gloom. Google reports sales of $15.4 billion in 2014’s first quarter, which represents an increase of 19 percent compared to 2013.
Plus, people are clicking on 26 percent more advertisements in comparison with last year, and total earnings are at $3.45 billion, which is also better than 2013. This comes on the heels of the two-for-one stock split in early April 2014, which provoked considerable controversy.
A classy move
Google now has new Class C shares, which are traded under the GOOG ticker but do not allow investors to enjoy any voting rights at the annual shareholder meetings. If you have Class A shares, you still get voting rights.
The split was approved in court after a group of shareholders filed a lawsuit to block it from happening. That may have contributed to the 5.5 percent stock decline in the past 30 days.
Be that as it may, Google is moving forward, and spending big bucks on new technologies such as the recent purchase of Titan Aerospace. Purchasing a startup to get hold of solar-powered drones might give Google the boost it needs to drive stock prices back in the right direction.
If a drone can’t save Google, what can?