Google Reports Earnings for Q2 2012; Revenue Jumps to $12.2 Billion
Google reported its earnings for Q2 2012, with its quarterly revenue
growing to $12.2 billion. Of that, nearly $1.25 billion was due to its
acquisition of Motorola, while organic growth contributed nearly 21%
growth. Its overall gross margins also took a hit following the Motorola
acquisition, due to much higher relative cost of revenues for the
hardware business.Google’s operating income was nearly $3.2 billion and its net income was around $2.8 billion.
Of the $12.2 billion, advertising revenue from its own website was close to $7.5 billion, while ad revenue from its network was about $3 billion. Other revenues added up to $0.44 billion, while revenue from Motorola added up to $1.25 billion.
There
weren’t many surprises this earnings season; Google’s aggregate paid
clicks increased 42% this quarter, while its cost-per-click declined
nearly 16%. Both changes can be attributed to the increasing penetration
of mobile devices and mobile search.
Traffic acquisition costs, or the portion of ad revenue shared with partners, increased from 24% of revenue to 25%.Interestingly, Google’s cash reserves have ballooned up to almost $43 billion.
Larry Page, CEO of Google, said:
“Google standalone had a strong quarter with 21% year-on-year revenue growth, and we launched a bunch of exciting new products at I/O – in particular the Nexus 7 tablet, which has received rave reviews. This quarter is also special because Motorola is now part of the Google family, and we’re excited about the potential to build great devices for users.”via Google
Microsoft Reports Q4 FY2012 Earnings; First Ever Loss
Microsoft has reported its earnings for Q2 2012 (Q4 FY12) and while
it continues to see steady revenue growth with revenue rising to $18.06
billion, it has reported its first loss ever ($492 million), primarily
due to an non-cash goodwill writedown it took due to its failed
acquisition of aQuantive in 2007. If we adjust for the impact of the
writedown, Microsoft would have reported a profit of more than $5
billion.As expected the Business (Office and Enterprise) division posted revenue of $6.29 billion, up 7% year-over-year, while the Server & Tools business posted revenue of $5.09 billion, up 13%. The Windows division saw a 1% decline in revenue to $4.15 billion, as Microsoft decided to defer revenue from its Windows 8 upgrade offer to the next quarter. Entertainment & Devices continued to grow the most, with revenue increasing to $1.79 billion, up 20% year-over-year.
Online Services, as usual, continued to be a disappointment, and posted a modest increase in revenue but a massive operating loss, thanks to aQuantive and Microsoft’s other failed endeavors.
The next couple of quarters are going to be very crucial for Microsoft. Sales should be driven primarily by the launch of Windows 8 and Office 15. We also expect Entertainment and Devices revenue to be boosted by sales of the Surface tablets, and the expected launch of the next Xbox sometime in the next year.
Steve Ballmer, CEO of Microsoft, said:
“We delivered record fourth quarter and annual revenue, and we’re fast approaching the most exciting launch season in Microsoft history. Over the coming year, we’ll release the next versions of Windows, Office, Windows Server, Windows Phone, and many other products and services that will drive our business forward and provide unprecedented opportunity to our customers and partners.”via Microsoft
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