Google’s New $1 Billion Mobile Business
October 16, 2010 1 Comment
That’s what I call the business. It has been only a few years that Google got into the mobile space and already making $1B revenue from it. The company recently reported $2.17 billion in profits on $7.29 billion in revenues during the last quarter. Revenues were up 23% from a year ago when it brought in $5.94 billion and profits were up 32% from $1.64 billion in the year-ago period.
During Q3 earnings call a few days ago, Google did something it has never done before: It broke down the numbers from some of its key businesses. I am guessing the company revealed these numbers, not just for kicks; they wanted to make it clear that search isn’t the only revenue-generating arm of the Google empire. Google needs these divisions to grow in order to expand its online empire.
– Display advertising: The company’s annualized run rate for display ad revenues is approaching $2.5 billion, according to Rosenberg. Google called it its next billion dollar business, and that it’s already here. Much of Google’s display ad business comes from its $3.1 B acquisition of DoubleClick.
– YouTube: While Google didn’t reveal specific revenue numbers for YouTube, the company did say it is monetizing 2 billion views per week, up 50% from last year. Recent reports suggest that YouTube is approching $1 B per year revenue.
– Mobile: The annualized run rate for Google’s mobile business is $1 billion this year. That means, if things stay on track, mobile will become yet another billion-dollar business for the search giant. As a note, this is really more about Google’s mobile ad business and less about Android, which is free for companies to use.
Google’s business objective with Android, of course, is to drive new search revenue and charge for premium services that it makes available over the top of the OS. The company claims Android users already make twice as many search queries as their smart-phone counterparts.
From the revenue break down, it’s clear that search isn’t the only revenue-generating arm of the Google as it used to be.