We’re in the thick of earnings seasons, friends, and Google just pushed out its latest spate of financials for our eager delectation. Here’s the skinny: Google reported a total of $18.01 billion in revenue (closer to $14.5 billion if you don’t count those pesky traffic acquisition costs), less than what Wall Street analyst types expected it to. We’ve seen Google dump more of its money into research (as befits a company that such wild-eyed ambitions), and that trend doesn’t seem to be going anywhere fast.
By sinking 16 percent of its total revenue into research, Google’s R&D spending habits stayed roughly equal with its actions last quarter… which is still a pretty huge improvement over the year-ago quarter. Yeah, we’re not shocked by Google’s predilection for research either. When you’ve got a guy like Larry Page sitting behind closed doors with a bunch of big brains trying to suss out what problems really need fixing, it’s only natural to see Google pour money into its more ambitious divisions.
Thing is, advertising and search is still Google’s bread and butter; the worse that does, the less Mountain View can ultimately funnel into its myriad moonshots. The company’s cost-per-click is down 3 percent year-over-year, and while that doesn’t sound like the most dire dip, it still means that advertisers are playing slightly less for their ads than they have in the past. Those so-called CPCs have been on the decline for a few quarters now, though paid clicks — how many times people click on ads on Google sites and others that use Google’s platform — is up 14 percent since last year.
Google’s also getting to be a more expensive company to run, if only just – operating expenses creeped up to $6.78 billion, or about 37 percent of the search giant’s revenue pie. Need a little context? This time last year, Google only spent just a hair over $5 billion to keep everything running, which shakes out to 32 percent. Naturally, we can peg at least some of that on the company’s growing headcount – 2,036 more people work for Google now than at the end of September 2014, a testament to the amount of meat and grey matter needed to keep the Googleplex churning away. Google also dumped $3.55 billion into capital expenditures, which in this case refers mostly to “real estate purchases, production equipment, and data center construction”. That’s a cool billion dollars more than it did three months ago and this quarter last year, though CFO Patrick Pichette said that was thanks in large part to a hefty property buy in Redwood City, CA.
Source: Google Investor Relations