The online advertising industry in America has been enjoying a very good period of activity recently, with US Internet ad revenues reaching a record $12.1 billion in the first half of this year.
Google is at the forefront of this arena, leading the charge and benefiting massively. The search engine giant just posted a 32% jump in profit and 23% increase in revenue for the last financial year. When compared to last year, the amount of users clicking on Google ads has risen 16% and the average price that marketers are paying Google per click has increased by 3%.
Investors are concerned however that this rate of growth is not sustainable. Google is responding by continually looking for new models for growth. The search engine’s most recent attention has been focused on maximising revenues generated from their display network, and via Google services on mobile devices.
Jonathan Rosenberg, a Google senior vice president, said the company’s display business is on track to generate more than $2.5 billion in annual revenue. Google’s display network includes ad exchange for sites across the Web, and even on YouTube (which Google owns if you didn’t already know).
Google has also managed to capitalise on mobile search where the amount of search queries via mobile has increased by 500% over the past 2 years. Their Android mobile software is given away free to handset makers and is shaping up to generate them more than $1 billion in the coming year.
Even with all this action, there does not appear to be an end in sight and the sky is the limit for Google. The company has started to aggressively seek out the best technological talent to bring into their ranks, having hired 1,500 new employees since June. Watch this space as we continue to watch Google grow.
Google Inc. Factoid (as at the time of this post)
Revenue: $US27.55 billion
Qtrly Revenue Growth (yoy): 22.60%