Pay Per Click Advertising Blog

Google's First Quarter Earnings 2014

Jason Thomas - Tuesday, May 13, 2014

These are Google’s financial highlights for Q1 2014, taken directly from the Google announcement.

Revenues and other information - Google Inc. revenues for the quarter ended March 31, 2014 were $15.42 billion, representing a 19% increase over first quarter of 2013 revenues of $12.95 billion. 

  • Sites Revenues - Our sites generated revenues of $10.47 billion, or 68% of total revenues, in the first quarter of 2014. This represents a 21% increase over first quarter of 2013 sites revenues of $8.64 billion. 
  • Network Revenues - Our partner sites generated revenues of $3.40 billion, or 22% of total revenues, in the first quarter of 2014.  This represents a 4% increase over first quarter of 2013 network revenues of $3.26 billion. 
  • Other Revenues - Other revenues were $1.55 billion, or 10% of total revenues, in the first quarter of 2014.  This represents a 48% increase over first quarter of 2013 other revenues of $1.05 billion. 
  • International Revenues - Our revenues from outside of the United States totaled $8.76 billion, representing 57% of total revenues in the first quarter of 2014, compared to 56% in the fourth quarter of 2013 and 55% in the first quarter of 2013. 
    • Our revenues from the United Kingdom totaled $1.58 billion, representing 10% of total revenues in the first quarter of 2014, compared to 11% in the first quarter of 2013. 
  • Foreign Exchange Impact on Revenues - Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the fourth quarter of 2013 through the first quarter of 2014, our revenues in the first quarter of 2014 would have been $50 million higher. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the first quarter of 2013 through the first quarter of 2014, our revenues in the first quarter of 2014 would have been $163 million higher. 
    • In the first quarter of 2014, we recognized a benefit of $8 million to revenues through our foreign exchange risk management program, compared to $35 million in the first quarter of 2013. 

Reconciliations of our non-GAAP international revenues excluding the impact of foreign exchange and hedging to GAAP international revenues are included at the end of this release. 

  • Paid Clicks - Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 26% over the first quarter of 2013 and decreased approximately 1% over the fourth quarter of 2013. 
  • Cost-Per-Click - Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 9% over the first quarter of 2013 and remained constant from the fourth quarter of 2013. 
  • TAC - Traffic acquisition costs, the portion of revenues shared with Google's partners, increased to $3.23 billion in the first quarter of 2014, compared to $2.96 billion in the first quarter of 2013. TAC as a percentage of advertising revenues was 23% in the first quarter of 2014, compared to 25% in the first quarter of 2013. 

The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.39 billion in the first quarter of 2014. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $845 million in the first quarter of 2014. 

What does this mean for you?  What do Google’s 2014 first quarter results mean for pay per click?

This blog written by Jason Thomas



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