Google Q2 Revenue Jumps 32%

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GoogleGoogle put a smile on shareholder’s faces when it reported a 32 percent year-over-year increase in revenue on Thursday. The Internet search giant reported US$9.03 billion in revenue for its second fiscal quarter, or $6.95 billion after paying out ad commissions and other fees.

Net income for the quarter came in at $2.51 billion, up from $1.84 billion in the same quarter last year. Google said the number ads users clicked climbed 18 percent for the quarter, and some 97 percent of the company’s revenue for the quarter was ad-generated.

YouTube and DoubleClick, both owned by Google, helped bump up the company’s bottom line, and the company has high hopes for its just launched Google+ social networking service.

Facebook will no doubt watch Google’s progress with Google+. The service, which is in beta and only about two weeks old, is said to already include 10 million users. Assuming Google can draw users away from Facebook, it could potentially increase its ad-based revenue even more — and at the expense of Facebook.

Comments

MOSiX Man

Wow. If they can sustain that, it’ll be phenomenal for them and their shareholders.

wab95

Jeff:

I know you are one of the ‘invited’ to join Google+, which is not yet open to the public. In fact, a sign on the Google+ welcome page states that they are over-capacity. I have heard that the interface is very FB-like.

I remain a FB-sceptic, and only use it to keep tabs on my kids and a very few friends and family. I doubt that I will want two social network identities and sites, and will likely only move to Google+ if my kids do.

Perhaps at some point you can share your thoughts on the relative merits of each, or at least on your experiences with Google+.

MOSiX Man

Also, if Google+ succeeds in drawing a lot of users away from Zuckerbook, I can see one hellacious fight exploding between the two companies. The question for us is: If you want to keep your identity and personal details online, do you trust Google or Facebook to whore you out less?

wab95

The question for us is: If you want to keep your identity and personal details online, do you trust Google or Facebook to whore you out less?

Now that’s the question of the day, although it is a little like asking, “Which species of mosquito do you expect to bite you, an Anopheles or Aedes variant?” Both will, and your choice (if you can choose) depends on whether you prefer malaria or dengue.

Disease-free alternatives may be few and non-viable.

Lee Dronick

The question for us is: If you want to keep your identity and personal details online, do you trust Google or Facebook to whore you out les

I do not share too much personal info on Facebook.

My hometown is there because I want to connect with old friends, same with schools I attended. My current city of residence is there because that is no secret and old friends will want to get together when they visit. My birthday is inaccurate so as to make it harder for someone to steal my identity, but close enough to accept felicitations. As much as Facebook hounds me for it I do not give them my phone number. My email address listed with them is a throw-away and if get spammed up I will simply delete it. I do not turn on location services with my iOS Facebook app nor do I “check in” to places; After the fact I may post that the wife and were at the theatre or a restaurant. I also do not let people who are not friends to access my info.

I also logout of Facebook every time I leave the site. Otherwise their tracking bugs will follow you around the web.

a sign on the Google+ welcome page states that they are over-capacity. I have heard that the interface is very FB-like.

Facebook like? I shudder at that image smile

Nemo

When you look at the Android ecosystem, you must wonder who benefits from it.  Developers, especially those with a subscription model, aren’t making any money.  Android OEMs are in the same position as Windows OEMs before them, that is, they are in a cutthroat commodity business with razor thin margins. 

So why the exertions for Android?  Well, developers, we’ve learned, are reducing their efforts to develop for Android and are voting with their apps, directing most of their efforts to iOS, where they can make some money, real money. 

Android OEMs are stuck with Android and build devices for it, because they haven’t, until lately, had to pay any royalties for it, whereas Windows Phone 7 and Web OS require a royalty.  So Android has been, until lately, a better business proposition than Windows Phone or Web OS.  But the days of free Android appear to be coming to a close.  Microsoft has been having considerable success in forcing Android OEMs to pay for its IP; Oracle has an infringement suit, which, if successful, will impose additional expensive royalties on Android, and Apple has several infringement lawsuits against leading Android OEMs, which, if successful, will require Android OEMs to pay Apple for past infringement and remove critical Apple IP from their Android phones.  So the business proposition of Android as a free mobile OS is eroding and may vanish.

So from whence does all the sound and furry and exertions for Android come?  Well, it comes from the one party that is making real money from Android; that party is Google, which makes money, a lot of money, from its services (search, location, etc.) that its licensing restrictions effectively mandate be on any Android phone sold outside of China.  While developers’ profits on Android languish and while Android OEMs suffer razor thin profits on commoditized Android phones and face expensive IP infringement suits with possibly ruinous consequences, Google gets fat and happy with ad revenues and revenues from selling the personal users’ information that its services on Android phones capture. 

So, of course, Google champions Android and exerts itself to develop and promote Android, because it profit from Android so much, even though it doesn’t shared those profits with partners in its Android ecosystem, except for one other party, about which more, infra.  But we recently learned that Google’s exertions for Android and the protection of its Android ecosystem has its limits.  In bidding for the Nortel patents, Google wasn’t willing to place any greater burden on its Android revenues than, by my estimate, about $2 billion to protect its Android OEMs from the infringement suits that they face.  Any more would have detracted from those luxurious profits that Google just reported, and as we see, Google isn’t much for sharing its profits with its partners, Android developers and OEMs.

The only other partners in the Android ecosystem that benefit are the carriers.  Android is a great deal for them.  Google lets them modify Android to include their revenue generating services in ways that ordinary users can’t remove.  And Android provides some minimal leverage against Apple when negotiating for Apple’s iOS devices.  And the plethora of commoditized Android phones means that no Android OEM has any bargaining leverage with any of the carriers.  So Android is a good deal for carriers.

That’s who benefits from Android:  Google and the carriers.  If, however, you are an Android developer or OEM, you get the short end of the stick and are told to lick it and like it.  Developers, at least, are exercising another option, to develop instead for iOS.  As for OEMs, if the royalties, legal fees, and possibly court order restriction for Android continue to mount, how long will it be before they look to Microsoft’s Window Phone and HP’s Web OS for salvation, that is, obtaining patent protection and predictable royalties for a full featured mobile OS?

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