Google’s search business struggling

Although Google is scrambling to meet consumers as they flock to mobile devices, the question is whether it is moving fast enough.

When Google announced its fourth-quarter earnings, investors were watching closely for positive signals of Google’s progress in the evolution to a mobile world.

They received a disappointing sign: The price that advertisers paid Google each time someone clicked on an ad, known as cost per click, decreased 6 per cent from the year-ago quarter, falling for the fifth consecutive quarter, year over year. It has been declining in large part because mobile ads cost advertisers less, and more people are using Google on their mobile devices and fewer on their desktop computer.

Still, there was some evidence that Google was making progress in solving the mobile challenge. The price for clicks on ads rose 2 per cent from last quarter.

Analysts had mixed reactions to Google’s financial report. The company exceeded their expectations on profit, but disappointed on revenue. That was at least in part because analysts are still figuring out how to account for Motorola Mobility, the struggling cellphone maker that Google acquired last year.

Larry Page, Google’s chief executive and co-founder, was optimistic in a statement.

“In today’s multi-screen world we face tremendous opportunities as a technology company focused on user benefit,” he said. “It’s an incredibly exciting time to be at Google.”

The company reported fourth-quarter revenue of $14.42 billion, an increase of 36 per cent over the year-ago quarter. Net revenue, which excludes payments to the company’s advertising partners, was $11.34 billion, up from $8.13 billion.

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