Ronnie05's Blog

Google crosses the chasm from Desktop to Mobile! (And continues to rake the moolah)

Posted in Internet and Search, Mobile Computing by Manas Ganguly on October 18, 2013

Google Stock Price Since Debut

Google Stock Price Since Debut

Google shares jumped past $1000 mark, as its results convinced the markets that it had finally crossed the chasm between Desktop advertising to Mobile advertising. The rise of mobile devices had raised fundamental questions for the company: Would users conduct as many searches as on PCs? Would they click on as many ads? Would advertisers pay as much for a fingernail-sized spot on a phone as they do on a PC? The numbers Google disclosed undercut those fears. The number of “paid clicks”—the times a user clicks on an advertiser’s link during a search—surged 26%, the highest growth rate in a year.

As has been the case recently, the amount paid per click declined, this time by 8%. But the total volume of searches, driven by the rise of mobile devices, far outweighed the falling per-click rates. Mark Mahaney, an analyst at RBC Capital Markets, estimates the total number of paid searches will reach nearly 125 billion in 2013, up 24% from the prior year and nearly triple the figure of five years ago. That is the rough equivalent of 36 clicks on Google ads this year from each of the world’s approximately 3.4 billion PCs, smartphones and tablets. Steadily increasing sales of mobile devices could help Google for a long time. “What all this leads up to is that investors just feel this is a longer-term story.

The spurt made Google the third most-valuable U.S. company by market capitalization, with a value of $338 billion, behind only Apple and Exxon Mobil Corp. What also interesting is that the Google results have also given a spurt to the prices of Twitter, Facebook, Pandora, Yahoo! and other online companies which are contingent on ads.

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