Google is set to report its third-quarter financial results today after the market closes at 4pm EST. The tech juggernaut has been extremely busy, recently making a few acquisitions, facing regulatory challenges in Europe, competing with Amazon and preparing for new hardware releases. Yep, the internet’s reigning search king definitely had its hands full this past quarter. Hoping to make things a little easier to follow, we’ve put together a quick overview of a few key items that may come up during today’s big call.
Last year Google accounted for nearly 40 percent of all digital ad revenue in the US, which is slightly on the decline according to eMarketer, however this doesn’t mean that advertisers aren’t spending money. US digital ad spending is expected to reach over $50 billion, a sizable increase from last year’s $43.11 billion. Advertisers are starting to invest in mobile ads targeting smartphones and tablets, but these units come at a lower price than their desktop counterparts.
When it comes to US mobile advertising, Google held a market share of around 39 percent in 2013, slightly down from the previous year’s 47.2 percent, according to eMarketer. While this decline isn’t exactly debilitating for a heavyweight like Google, rival companies like Facebook are on the rise, accounting for an estimated 14.7 percent of all mobile ad funds spent in the US during 2013. The social media giant has been a boon for advertisers targeting mobile consumers.
The US mobile advertising market is estimated to increase to $19 billion in 2014 and Google’s share is expected to dip to around 38 percent, while Facebook is expected to be on the rise. The push for more mobile ads has definitely kept Google’s ad auction system competitive, but its reduced returns will likely have investors looking for change.
Like its mobile/desktop figures, Google doesn’t break out ad revenues for YouTube, however it’s expected that the company will talk about the platform’s growth. Earlier this year, Google launched a new program called “Google Preferred,” which makes it easier for advertisers to invest in YouTube’s top-shelf content. Earlier this week, Google announced that its preferred offerings had sold out.
Getting back to mobile, Google Play app downloads are on the rise and while Google doesn’t break out its Play Store revenues, analysts are still expecting growth. Despite announcing a new smartphone, tablet and set-top box, Google’s stock still took a small dip yesterday. Wall Street analysts are predicting an adjusted profit of $6.54 per share.
Google’s new product lineup will likely play a bigger role during the current quarter, as the holiday shopping season will soon be in full swing. You can listen to today’s earnings call on Google’s Investors Relations YouTube channel.