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Google's Missed Earnings

By October 18, 2012 12:08PM [link]

Someone (inadvertently) leaked Google's quarterly earnings report early, which shows falling advertising prices and lower income than expected, despite growing revenues. The stock fell nearly 10% before trading was briefly halted. Google is of course still making money, still has incredible talent and creates great products, and is still the clear market leader in some very profitable businesses. They're in this for the long haul and one missed quarter won't throw them off their game too much. However this reminds us that their growth is not assured and how much their fortunes are tied to advertising rates.

Especially troubling is their Motorola subsidiary, which is losing money. Any stumbles in the Android or Google world are sure to be music to the ears of Microsoft, which must see Android as its main competitor at this point instead of Apple. Apple is printing money with their iOS devices, but they don't have the market locked up and Android is happily taking up almost everything else now. Microsoft is making some nice products but hasn't seen market demand for them yet. Time will tell whether Microsoft or anyone else is able to wrest away any significant portion of the market from Android, which would give them a foothold to start taking on Apple. It's an exciting time to be in Mobile.

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