The company said it is selling $2.5 billion in display ads on an
annualized basis, based on its third-quarter performance, including banner ads, video
on YouTube, mobile advertising, DoubleClick AdExchange and the
Google display network.
Strikingly, the company's global mobile business has grown to $1
billion on an annual run rate, and that YouTube is selling ads on 2
billion video views a week. Mobile ads are counted twice, as both
mobile and display, said Chief Operating Officer Patrick Pichette.
The numbers were offered without context or a means to compare with
the past, and the company said it is breaking them out for
informational purposes one time only, and wouldn't do so again in
"We're seeing great momentum on new businesses," Senior VP
Jonathan Rosenberg said on the earnings call. "We're firing on all
cylinders in display."
Google issued the numbers after a quarter in which its core
business -- search advertising -- is booming. Google posted revenue
of $5.48 billion, a 25% gain over the same period last year, with
profit of $2.17 billion at a 32% increase. The company's stock has
fallen close to 14% year-to-date, but surged more than 8% to $589 a
share in after-hours trading.
"Search is still the heart of the web," Mr. Rosenberg said. "As
the internet continues to explode, there are more websites, more
video, more people coming online. The first thing they usually do
Analysts on the call also inquired about any plans Google may
have to offer social-based search results. Microsoft's Bing
recently announced a partnership with Facebook to generate social-based
search results where, for example, a user searching for movies
might see what their friends on Facebook may have posted about
movies they have recently seen or "liked."
Google currently doesn't show results from Facebook. CEO Eric
Schmidt, who uncharacteristically participated in the earnings
call, said: "Over time, as we get more information as to who your
friends are, we'll make search better, but that will be up to the
user to share that information with us. We want users to be more
logged into Google, because the more logged in they are, the better
results we can give them." Mr. Schmidt did not make clear exactly
how the company plans on indexing that kind of information or from
Given the explosive growth of mobile commerce, including the
proliferation of Android operating system, analysts inquired
whether Google might possibly adopt Apple's app-store model, where
users pay for particular applications. Mr. Schmidt said the company
will not go the route of Apple, preferring to get as many users --
and applications -- onto Android in order to better sell
Despite the company's aggressive pursuit of new revenue
opportunities, such as display advertising, it still commands the
search business with 73.3% of total U.S. search-advertising
revenues for 2010, according to eMarketer.
Said Mr. Rosenberg: "Search is still the most-monetizable moment
on the web."