If you weren’t aware of it already, both Google and Apple have posted their fourth quarter earnings. This is always an interesting time for the movers and shakers of the tech world. Fourth quarter earnings give analysts and pundits a chance to predict the future and proclaim that they have the answers for what’s to come for companies for the rest of the year. I don’t plan to know the future, but recent news regarding Apple and Google is definitely interesting. There is information to glean about the future of mobile – especially from Google – and about where the online advertising market is going.
A few days ago I wrote about Apple’s losses and Samsung’s successes. This was before Apple’s fourth quarter earnings shocked the markets. According to Reuters, Apple suffered from “weaker-than-expected holiday sales” that failed to meet analysts expectations. This has caused a nine percent drop on top of the losses the stock price has faced recently.
All of the enthusiasm about Apple is starting to wane. Of course, they made money – lots of it. It just wasn’t good enough for Wall Street. But there seems to be a general consensus among analysts that all of the hype is wearing off. For all of the progress Apple has created in mobile and smartphone use, it’s fascinating to me that Wall Street sees them as failing right now. In the meantime, one of Apple’s primary competitors, Google, is turning things around and making hints at the future of their mobile ads.
Google’s Fourth Quarter and Larry Page on Mobile
Spurred by holiday advertising, Google’s fourth quarter earnings were up seven percent, which came in above estimates. Google had a great fourth quarter, and unlike Apple, there are a lot of reasons Google is happy about mobile.
The primary source of Google’s revenues has always been advertising – specifically desktop ads. Currently mobile ads are much cheaper than the ads Google sells for desktop/computer platforms. As Jim Edwards reports on the Business Insider, when it comes to those desktop ads, Google “appears to have slowed the decline in the ad prices it is able to charge.” There were fears that price declines would continue, threatening the company’s revenue, but the latest numbers seem to show it has stabilized.
More importantly, Google’s CEO Larry Page has taken the time to comment on mobile ads and Google’s future. Jim Edwards again for BI, writes that “Page thinks the imbalance between mobile advertising and desktop advertising … won’t last very long. … Ultimately mobile may overtake desktop as a revenue generator for Google.”
For people keeping an eye on the market and Google, this is a very pertinent prediction. Page sees a great deal of opportunity in mobile advertising and it seems he thinks we’re just on the cusp of shifting into primarily mobile ads over Google’s traditional bread-and-butter of desktop ads.
A telling quote from Page comes when he tells one interviewer that mobile has “amazing opportunities for advertisers and for businesses.” He goes on to state that he thinks the versatility of mobile and ease of following through with calls to action and advertising offers “will work a lot better for users and for advertisers and businesses.”
If Larry Page is Right…
If Larry Page is right – and one should put a lot of stock into what the CEO of Google says – mobile very well could overtake the desktop advertising we’ve all been used to over the past ten to fifteen years. And it might happen fast. Google certainly looks poised to be in a great position to take advantage of this shift. When it comes to Apple, I don’t think anyone truly knows if their next product will reverse their downward trend or merely continue it.
Are you prepared for a strong shift into mobile advertising in the coming years?
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