Google takes hit on slower-than-expected growth

Google profit jumped in the recently ended quarter, but the leap fell short of market expectations as smartphone-centric lifestyles brought with them a shift to cheaper mobile ads. The Internet colossus reported net profit up 41 per cent year-over-year at $4.76 billion in the final three months of 2014. The profit translates to $6.88 per share, below the consensus forecast of $7.11 per share. Revenues were up 15 per cent in the quarter to $18.1 billion, also slower than anticipated as Google saw slowdowns in some of its online advertising metrics such as costs per click.

As people increasingly embrace the power of the smartphone, they are using Internet search engines less and using apps more.

Forrester analyst Frank Gillett

Google shares whipsawed, losing ground and then gaining, as Wall Street came to grips with concerns about a shift to lower-cost ads on mobile devices and the technology titan’s penchant for spending on “moonshots” like self-driving cars and Internet-linked Glass eyewear. Google is devoting resources to self-driving cars, Glass eyewear, Fiber super-fast Internet networks, and a Project Loon aimed at delivering Internet to remote or rural areas using gear floating from high-altitude balloons. While critics see such endeavors as Google straying from its area of strength in online search, some people view the moves as innovations aimed at keeping the company relevant to evolving lifestyles.

google growth Business