Google’s (M)ad Money

European shares ascended for a fourth consecutive week, but hit a wall on Friday after the technology sector showed signs of ailing on both sides of the Atlantic. The European tech sector dropped by 0.7 per cent, following weaker-than-expected numbers from Microsoft and Google, two tech giants.

Google’s business has come under intense pressure due to mobile advertising prices. On Thursday the internet giant disappointed investors for both profit and revenue, causing the shares to plummet. Worries over the cost-per-click prices – paid by advertisers on Google – continue to weigh heavily on the company and its increasingly impatient stockholders.

Google’s aim to effectively monetize mobile is still work in progress, as cost-per-click revenues fell by 6 per cent compared to the corresponding quarter last year. The trend is worrying considering Google’s increasing reliance of mobile advertising coupled with the falling prices of mobile advertising. Google invented a new business model, but now it needs to reinvent itself to keep up with the changes in the universe that it created.

The constantly expanding demand for mobile computing devices has fundamentally morphed the online business scene in the last few years. Companies such as Facebook and Microsoft have begun to stumble towards a mobile-centric approach to meet the consumers’ mounting demands. Microsoft is below par when it comes to innovation in mobile advertising, while Zynga’s CEO gave himself the boot following poor results. The weight of success is almost solely on Google’s shoulders as it has the ability to both make and break the market. Its only serious competitor is itself therefore the marketplace is arguably slightly unhealthy.

Читайте также:  Banc de Swiss Review

Writing for Barron’s, Dimitra Defotis pointed out that “advertising is not immune to economic weaknesses in the United States or globally. That weakness is an ongoing risk, as is competition and the threat of greater regulation.”

Indeed, the coin has two sides. For the investors, the falling Google stock looks attractive, but for Google’s visionaries, the question comes down to simple math. If the company’s cost-per-click revenues keep falling as ad prices decline, should Google reevaluate its focus on mobile advertising or push onwards and keep believing that mobile advertising is the future?

Оцените статью
Добавить комментарий

  1. Johnb724

    Hello, always i used to check blog posts here in the early hours in the daylight, geeefkdaeaef

    Ответить