Google added $1.3 billion in ad revenues, sequentially, and appears to have slowed the decline in the ad prices it is able to charge, according to its Q4 2012 earnings.
Google’s cost-per click — the amount it is able to charge advertisers — declined 6% year on year. Those prices have now declined for five straight quarters, but this decline was less than previous ones. That suggests Google may be about to turn around its pricing problem.
Ad prices on Google had declined recently because of a massive increase in mobile ad inventory outstripping demand. Clients generally prefer to pay less for mobile ads than desktop ads.
These three charts show what’s happening. First, the big picture. A nice big jump in overall revenue, including Google’s Motorola unit, to $14.4 billion:
Most of that increase appears to have come from a healthy increase in ad revenues:
Here’s what’s happening to demand for Google ads. Google is still selling more ads, but the price of each one remains in decline (because of cheap mobile ads). However, Google appears to be slowing the decline in those prices. If Google can turn this around and increase mobile ad prices, that would be HUGE for its revenues:
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