Google’s 3Q, Online-Ad Rebound

October 15, 2010 § Leave a comment

Google reported its third quarter earnings report yesterday, showing a resurgence in online advertising. According to WSJ, Google and other Web companies is benefiting from a “broad recovery in online ad spending” this year, and “U.S. Internet ad revenues reached a record $12.1 billion in the first half of this year”.

Googles has been endeavoring to demonstrate its potential in multitasking, especially in the realm of online advertising. For the first time, Google broke revenue for display ads and mobile services, categorized by CEO Eric Schmidt as newer businesses, as opposed to search ads which is still the core  business and primary source of revenue for Google.

The display business is very promising since YouTube now gets two billion monetized views per week. In the Conference Call, Google’s senior vice president Jonathan Rosenberg revealed that in the new ad formats, click rate increases 10% for some, and 30% for some others, display display advertising is on an annual run rate of $2.5 billion, and mobile services is on an annualized run rate of $2 billion. He also said that Google is firing on all cylinders in display advertising.

However, I am a little bit skeptical towards the statement Rosenberg made on its mobile section. According to Rosenberg, “mobile search queries have increased 500% over past two years”. The 500% is dubious because the base number is not clear. When something is just starting off, it’s easy to for it to quintuple over a short period of time.

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