Google Inc. (GOOG): What You Need To Know About CPC Rates

Google Inc. (GOOG)Google Inc. (NASDAQ:GOOG) took it on the chin with the premature but very surprisingly disappointing quarterly earnings report Thursday, as the company missed on both the top line and bottom line by significant margins. The stock plummeted 9 percent in a matter of minutes Thursday afternoon, causing NASDAQ to halt trading for a time. Even after everyone has had chance to pick up the pieces from the crash, get the license plate number and assess damage, the stock was still heading down as the numbers continue to be digested.

However, there is certainly a very silver lining in this otherwise very dark cloud for Google Inc. (NASDAQ:GOOG). And this silver lining may be anything but shiny for any print-media competitors (minus Newsweek, may it rest in peace).

A couple very interesting points are sort of buried in the middle of the summary of the earnings report, and they have to do with the company’s advertising business, which is really the heart and soul of the company’s revenue and business model. First, there is the “paid clicks” category and the cost-per-click (CPC) for the ads featured on Google and partner Web sites.  In terms of paid clicks, which essentially is the depth and breadth of advertising, rose by 33 percent over the same quarter of 2011 and 6 percent over the second quarter of 2012. Under the cost-per-click, that category dropped by 15 percent over the prior year and 3 percent over the previous quarter of 2012.

What does this mean for Google Inc. (NASDAQ:GOOG0 and advertisers? It means that the advertising business is doing well – to see a significant growth in the number of paid clicks along with a decrease in the cost per click (which actually is more around 8 percent when currency fluctuations are figured into the equation), this tends to mean that Google Inc. (NASDAQ:GOOG) is finding more users are clicking on their ads and it is benefiting the return of investment for the advertisers. The more clicks an ad gets, the cheaper the ad is for every click-through it receives.

This could serve as a further demonstration of the overall activity of consumers online and away from print and other offline media. Google Inc. (NASDAQ:GOOG) was at the forefront of this evolution of consumer attitude and preference, and it has reaped the rewards – and continues to do so, bad earnings reports notwithstanding. These two figures – paid click and cost-per-click – should be the main numbers that investors in Google Inc. (NASDAQ:GOOG) stock – like billionaire fund manager Julian Robertson of Tiger Management – should continue to watch before they give in to the short-term panic.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!