updated 04:48 pm EDT, Wed April 16, 2014
Cost per click dropping, growth rate slowing for dominant search engine
Google today announced financial results for the quarter that ended in March. The search engine giant reported consolidated revenues of $15.42 billion for the quarter, an increase of 19 percent compared to the first quarter of 2013. Operating income in the first quarter of 2014 was $4.12 billion, or 27 percent of revenues. Earnings per share in the first quarter was $5.04 on 685 million diluted shares outstanding, compared to $4.97 in the first quarter of 2013 on 673 million diluted shares outstanding.
"Google's revenue was $15.4 billion, up 19 percent year on year", said CEO Larry Page. "We got lots of product improvements done, especially on mobile. I'm also excited with progress on our emerging businesses."
Google sites generated revenue of $10.47 billion, or 68 percent of total revenue, a 21 percent increase over the first quarter of 2013. Partner sites generated revenues of $3.40 billion, or 22 percent of total revenues. This represents a four percent increase over the year-ago quarter in network revenues of $3.26 billion.
Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of network members, increased approximately 26 percent over the year-ago quarter, but decreased approximately one percent over the previous quarter. Average cost-per-click decreased approximately nine percent over the first quarter of 2013, and remained constant from the previous quarter.
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 a year ago. Acquisition costs as a percentage of advertising revenues was 23 percent in the first quarter of 2014, compared to 25 percent in the year-ago quarter.