Google Inc.’s fourth-quarter sales and profit missed estimated targets, as its advertising business faced tough competition on mobile devices.
Google is facing immense competition from Facebook and other web companies, which are alluring advertisement budget from users on tabs and smartphones while cutting its market share from advertisement. Similarly, marketers are also paying less for mobile ads, ultimately driving less revenue to Google’s online ad business.
According to EMarketer, “Google, which has introduced services encouraging marketers to use its mobile features, saw its share of global mobile-ad revenue decline to 41 per cent in 2014, from 47 per cent in 2013, while Facebook’s rose to 18 per cent from 17 per cent.”
Mobile is a big concern and the whole world is shifting to mobile now. If Google loses its dominance on mobile, then it will lose a big market chunk. In addition, the amount Google receives per ad click is also decreasing, as a major portion of these clicks is driving from tablets and smartphones. The disappointing revenue growth interlinked with a rise in dollar as well. Google’s share has fallen 7% over the past three months.
Google is also investing heavily in new businesses to maintain growth and keep up its strength in the market. Google driverless cars, high speed Internet and web-linked glasses are one of them.