GOOG: Google Shares Drop 8% On Thursday, Looking To Future of Mobile Ads

On Thursday, Google shares (NASDAQ:GOOG) went free falling faster than Felix Baumgartner, and by the time NASDAQ shut down trading, the shares would see a huge 8% drop in price.

The event that caused the sudden sell off was the leak of Google’s earnings to investors as the executives, and Larry Page himself, were all preparing to deliver their quarterly results.  According to Google, R. R. Donnelley & Sons, the publisher for their earnings, were the cause for the early release.  R.R. Donnelley & Sons says that it is currently investigating the situation.

Google finds itself in a situation that other tech companies are in as well, and that is figuring out the most effective way to leverage advertising on mobile devices.  The numbers show that the total number of clicks on ads for Google are up 33 percent, but the cost per click has dropped 15 percent from the same period last year.

The reason for the 15 percent drop in cost per click is because advertisers do not see the sales conversions from mobile phones that they see from regular desktop computers.  According to the NYTimes, people are making purchases from ads on Google 4 percent of the time after clicking a desktop published ad, but only 2 percent when clicking an ad on a mobile phone.

And with Google’s bread and butter being the revenue from advertising, this is a big problem, and investors agree.

However, Google CEO Larry Page says that “monetization on mobile queries right now is a significant fraction of desktop,” – meaning, the search queries that people are typing in directly on their mobile phones.  He said Google was exploring pushing hard to uncover new, enhancing ways to make more money on mobile as people increasingly used phones and tablets in addition to and instead of desktop computers, and said it was “uniquely positioned to get through that transition and to profit from it.”

Larry Page also went on to say, “I am not worried about this in terms of our business at all… I think it’s an opportunity for us.”

As always, Google is taking an the approach of “you see a problem, I see an opportunity.”  After all, this has been Google’s mantra from the beginning and it has served them well over the years.  And because of this, I’d expect to see some pretty amazing mobile features and enhancements coming from the search giant.

Perhaps even a whole new paradigm of mobile advertising.

What do you think about Google’s stock price (Goog) on Thursday and the situation surrounding the future of mobile ads?

via NYTimes

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