Excluding traffic-acquisition costs, the business generated net revenue of $9.83 billion, compared to $8.13 billion last year, the company reported on Tuesday. The numbers eclipsed a $9.6 billion average predictons from six analysts.
“Business looked really strong, especially from a profitability perspective. They really grew their margins in the core business,” said Sameet Sinha, an analyst with B. Riley Caris.
“Most of that strength seems to be coming from international markets which grew revenues quite substantially: up 23 percent year over year, versus the 15 percent growth in the third quarter.”
As Reuters writes, average cost-per-click, a critical metric that denotes the price advertisers pay Google, declined 6 percent from the previous year, “the fifth consecutive quarter of decline but an improvement over the third quarter’s 15 percent slide.”
Google executives announced earlier on a conference call that it intends to change policy considering the quality and quantity of ads appearing on certain of its Web properties had helped shore-up click prices while lowering the overall growth rate of paid clicks in the holiday quarter.
“Click prices are still declining, but it’s better than expected,” said BGC Partners analyst Colin Gillis.
The decline in Google’s click prices can be explained by a result of consumers’ shift to smartphones, where the company’s ad rates are lower than those on Google’s standard website.
The Internet searching giant admitted growing demand for its spectrum of online advertising services, which also includes mobile, display and video ads alongside with its newly-launched product listings, though the company did not provide specific financial results for the individual businesses.
“More small enterprises increasing their spending collectively on Google’s various products,” continues to drive Google’s growth, said Pivotal Research Group Analyst Brian Wieser.
Investors did manage to overcome another quarterly loss at the Motorola Mobility mobile phone business Google acquired last year.
The company’s move was considered to be one of various “big bets” that Google Chief Executive Larry Page has made to better position the company for a changing technology landscape defined by mobile gadgets and social networking.
“We now live in a multi-screen world,” said Page, adding that “we feel naked without our smartphone.”
Page went on, adding that Google had plenty of work to do in “managing our supply better as well as building a great customer experience,” but admitted that the company remains squarely focused on opportunities around newfangled devices such as smartphones.
When asked about the potential threat from a recently-launched social networking search product by the most popular social network Facebook, Page reminded of Google’s years of online search experience and innovations such as voice-based search.
Consolidated net income in the fourth quarter was estimated about $2.89 billion or $8.62 per share, compared with $2.71 billion, or $8.22 per share, in the year-ago period when Google had not yet acquired Motorola.
Excluding certain items, Google said it earned $10.65 per share in the fourth quarter.
“The core business is a great business and the fourth-quarter is always a time for Google to shine. However, Motorola is still losing money and click rates still declined. They only declined 6 percent, but go back four or five quarters and click prices were improving. So mobile is still pressuring click prices,” Gillis said.