Google Stability Returns to Online Advertising

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Google have announced higher returns than expected this quarter as the online advertising market has stabilised from its little wobble last quarter in the States.

Wall Street forecasts expected further plunges in the online marketing industry as a whole, but Google has once again beaten the trend and exceeded expectations. Total revenues increased to $5.5 billion (£3.4 billion) up by 3 per cent. After removing affiliate fees, Google’s revenue generated from digital marketing this quarter came in at $4.07 billion (£2.49 billion), $10 million ahead of Bloomberg estimates.

Google’s return to form should be echoed throughout the advertising industry online as the market settles from the blip that occurred earlier this year. Google CEO Eric Schmidt said: “We’re not at the moment looking at the downward spiral we thought we might be six months ago,” according to Financial Times.

The uptake of advertising on Google’s video streaming site YouTube has helped revenues across the Atlantic, although at the monstrous rate of growth, YouTube is still much more of a financial burden to Google than a blessing. The company announced in May that they were receiving over 20 hours of uploaded content every minute to the website which is taking its toll on bandwidth and storage capacity.

Google have been smart to take precautions though, axing the unprofitable newspaper and radio-advertising arms of its business and focusing on the online model. “What they’ve done is gone and eliminated the obvious initiatives that were not performing very well,” analyst Youssef Squali told Bloomberg.com.

The market is returning to normality, with Google keeping a firm grip at the top of the online advertising tree.

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