Display business and YouTube
Google’s non-search ads business, including YouTube and display, are of critical importance for the company’s future growth. YouTube’s popularity among consumers shows no signs of slowing down and now has a user-base of more than 1 billion people who are viewing more than 4 billion videos each month. And YouTube has a strong footing in the international market as well, with more than 70% of its web traffic flowing from overseas.
YouTube plays well into Google Inc (NASDAQ:GOOG)’s mobile monetization strategy, as more than 25% of its total views are on mobile devices, and in the domestic market views on mobile devices make up 40% of its usage. Speculations about YouTube’s mobile revenue have been rife, but numerous estimates peg YouTube’s annual ad revenue at roughly $5 billion. And revenues from this video asset are expected to rise rapidly in the future, driven by its TrueView ad format, which advertisers love.
In addition, Google’s AdSense for display advertising should drive the company’s numbers as more and more websites monetize user eyeballs by using Google’s technology. And Google is making it easier for advertisers to monetize fragmented audiences with its Enhanced Campaigns product, which allows marketers to run advertising campaigns across multiple screens and platforms.
A Bright Future
Google Inc (NASDAQ:GOOG) has a seen solid sell-off after reporting 2Q13 over concerns about lower cost-per-clicks for the company. The target price for Google on the Street has been trending upwards, with the highest being $1,175. Even though Google faces headwinds with lower prices per ad on mobile, the company is growing the number of ads portrayed rapidly.
The company is in a great position in its numerous business lines. The key drivers for Google remain its core search business on desktop and on mobile. Its non-search ads business, including display, YouTube, and mobile, are all performing very well. And its other smaller businesses including hardware and Enterprise are gaining more momentum. Google Inc (NASDAQ:GOOG) is seeing increased competition with social networking sites vying for traffic, and mobile apps enabling users to bypass the search engine of Google. But Google is a leader in a number of its operating segments, and has a very bright future.
Ishfaque Faruk has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG).
The article Google’s Story Remains Robust originally appeared on Fool.com.
Ishfaque is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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