Google has slowly started to become a mobile company but is wrestling with how to make as much money with mobile advertising as it has with the ads that appear on desktop computers. While the smart decisions made by the company has led to an increase in revenue and profits, mobile remained one of the company’s weak points. Some of the new types of mobile ads introduced by Google have paid off handsomely for the company, but not enough to offset the rest. The company has also seen success with its mobile businesses, like the Play store for Android devices.
In the fourth quarter, the company’s earnings report showed the continuing struggle with monetizing mobile ads. Nikesh Arora, Google’s chief business officer, said, “People aren’t distinguishing what they’re doing on different screens, so advertisers should be more agnostic about where they reach the user. The fundamental tenet is not to speak about mobile, mobile, mobile. It’s really about living with the users. What device are you on? What’s your question? How can we assist you? That’s a much broader and richer set of activities for us.”
Google has decided that some businesses, like manufacturing smartphones, is better left to someone else. Google recently announced its intentions to sell Motorola Mobility to Lenovo for $2.91 billion, after buying the company less than two years ago for $12.5 billion. Google’s failure to meet analysts’ earnings expectations for the fourth quarter was largely due to Motorola’s $384 million loss in the quarter.
Google has also begun to make plans for new kinds of devices and even robots. This year, consumers will be able to buy Google Glass, eyewear with tiny computers imbedded within them. The company has also purchased several robotics companies in the past few years. The company recently agreed to acquire Nest Labs, which makes Internet-connected thermostats and smoke detectors.
Colin Gillis, an analyst at BGC Partners said, “While Apple hasn’t even put out a bigger phone, Google is leading in wearables with Google Glass. It’s got driverless cars. It’s wiring up homes with tremendous Internet speed connections. Something’s got to pay off.” The company reported fourth-quarter revenue of $16.86 billion, an increase of 17 percent over the year-ago quarter. Net income rose 17 percent to $3.38 billion, or $9.90 a share.