Google Profits Increase To $2.8bn Despite 6% Fall In Ad Prices

Falling ad prices and Motorola loss fail to prevent profit at Google in Q2

Google recorded $3.2 billion (£2.1bn) profit during the second quarter of 2013, an increase from the $2.8 billion it made in the same quarter last year, but it is likely to be concerned about falling ad prices.

The average cost-per-click in the company’s money-spinning advertising business fell by six percent year-on-year, although the volume of adverts it sold during the quarter rose by 23 percent from this time last year.

Motorola Mobility, the smartphone manufacturer acquired by Google for £8 billion, posted a $342 million loss compared to a loss of $199 last year. However the division is widely believed to be readying a new smartphone, the Moto X, which could change its fortunes.

Google Ads fall

Google, search engines © Annette Shaff Shutterstock 2012With a 20 percent year-on-year increase in total revenues, Google is unlikely to be too concerned, at least in the short term.

“Google had a great quarter with over $14 billion in revenue – up 19 percent year-on-year,” said Larry Page, CEO of Google. “The shift from one screen to multiple screens and mobility creates tremendous opportunity for Google. With more devices, more information, and more activity online than ever, the potential to improve people’s lives even more is immense.”

The UK now accounts for 10 percent of Google’s worldwide revenue, a figure unlikely to go unnoticed by those who have accused the search giant of not paying its fair share of taxes in the UK.

MPs have estimated Google generated $18 billion in revenue from the UK between 2006 and 2011, but only paid the equivalent of just $16 million of UK corporation taxes in the same period.

The company has also courted controversy through its collection of data from people’s Wi-Fi networks using its Street View cars. Google avoided being fined by the Information Commissioner’s Office (ICO), TechWeekEurope has discovered that the privacy watchdog’s investigation into the matter was less than comprehensive.

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