Google reports stellar Q2 results, but still misses forecasts

Google has reported surging revenues that beat analysts’ forecasts, and a profit that was up by a quarter, but missing forecasts.

The company said that its second-quarter revenues rose by 22 per cent to US$16 billion, excluding the Motorola Mobility division, while profits were up by 26 per cent to US$3.5 billion.

Excluding the soon to be sold Motorola Mobility division, the company indicated that costs are also rising faster, as Google invested heavily in new data centres and hired an additional 2,414 staff in the three month period, taking its total workforce to 48,584 employees.

One significant change in headcount was the announcement that its chief business officer, Nikesh Arora is leaving the company to join Japan’s Softbank.

In Google’s own mobile operations, growth of so-called "other revenue" jumped by 53 per cent, led by increased mobile app sales, where Google creams off a percentage of the sales of third-party apps.

In terms of its own websites, the company said that the volume of clicks on adverts served up when people carry out a search rose by a third on its own websites, although the value of each click has continued to fall.

The contrary report is due to the increased use of mobile devices, where advertising revenues are a fraction of the value of their desktop counterparts.

This marked the 11th consecutive quarter of decline in the average cost per click, although the decline is slowing thanks to the rise of tablet use.