Google’s $14B quarter falls on deaf ears as Motorola continues bleeding money

By , Jul 18, 2013

Google Q213 (revenues by geography)

In an earnings call nearly devoid of specifics, Google announced its Motorola Mobility unit continues to be in the red, while revenue from its search business fell six percent compared to a year ago. Search revenue fell four percent during the first quarter amid declining ad rates.

Overall, the Mountain View, California headquartered Internet giant announced $14.11 billion in second-quarter non-GAAP revenue, up nineteen percent from $11.81 billion a year ago – and yet below Wall Street’s expectations.

Google’s CEO Larry Page announced the company saw 900 million cumulative Android activations worldwide, with more than 1.5 million units being activated each day, which is precisely the same data point he gave at Google I/O 2013 back in May…

“We’ve now activated more than 900 million Android devices worldwide – and we are lighting up more 1.5 million devices every day,” Google chief Larry Page told the gathering. “That’s pretty amazing given the first Android phone launched less than five years ago,” he added.

The iPhone launched six years ago and the App Store arrived the following year.

Google Q213 (Google vs Motorola)

More than 50 billion Android apps have been downloaded from the Google Play store, Page said in remarks re-published on Google+. Back in May, Apple announced 50 billionth download on the App Store.

The company has already paid developers more money this year than all of 2012, he claimed, although he didn’t provide specifics.

For reference, Apple CEO Tim Cook said during the WWDC keynote last month that the company thus far has paid developers an astounding ten billion dollars since the App Store’s inception five years ago.

The search monster also announced over 750 million people are using the Google Chrome browser, part of what Page described as “a world of abundant computing.” Indeed, the current computing environment is vastly different from the one in which Google began, one dominated by the PC.

Google Q213 (consolidataed revenues)

He also spoke of a “completely revamped” Maps interface where the “map is the screen.” In justifying axing a number of products on a regular basis, Page said “we need to stay focused,” cautioning how the search giant needs to invest “the vast majority of our resources and time in our core products”.

Beyond the few stats Page provided, Google executives spoke mostly in generalities, glossing over just why the company missed Wall Street expectations for $14.42 billion in quarterly revenue.

Here are two handy charts highlighting Google’s business metrics.

Google Q213 (revenue source)

Google Q213 (US vs international)

Pulling a Microsoft, the disappointment sent Google shares down five percent in after-hours trading. Surprisingly, Page hasn’t talked much about the upcoming Moto X super phone.

As you know, that phone will offer an always-on assistant, a bunch of pre-order customizations and long battery life, courtesy of a staggering 4,000mAh battery.

In past two earning calls, he dropped a bunch of Moto X superlatives.

In January:

Battery life is a huge issue. You shouldn’t have to worry about constantly recharging your phone. When you drop your phone, it shouldn’t go splat. Everything should be a ton faster and easier.

In April:

Battery life is a challenge for most people. You shouldn’t need to carry a charger around with you to make it through the day. If your kid spills their drink on your tablet, the screen shouldn’t die. And when you drop your phone, it shouldn’t shatter.

Also unspoken was what Google’s ultimate goal is for its Motorola Mobility unit, which continues to be a loss-making business as it announced a $342 million quarterly loss.

Google Moto X (Texas manufacturing)
“Yep. This guy is building exactly what you think he is. Designed by you. Assembled in the USA,” reads the caption on Twitter.

Earlier today, Motorola tweeted out the above picture of a guy supposedly building the upcoming Moto X flagship smartphone in Texas.

We should soon see how Wall Street views Google’s spin on an otherwise bad quarter .

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  • Re

    Google is losing money? Let the flame wars begin.

    • Gorgonphone

      yeah i agree

  • chris125

    Well the fact that Moto hasn’t released a new phone in like what almost a year I wonder why?

  • Joseph

    Hopefully Motorola can redeem themselves with this phone. You Apple fans damn best hope it does well, because competition is the key, and that means you might see some of the Moto’s features on an iPhone due to it, eventually.

    • Gorgonphone

      wont happen cause jit will run android..lol

      • Joseph

        I guess you haven’t tried it since ICS… :)

  • http://www.brotheryellow.com David Jonsson

    ‘falling on deaf ears’ is an insulting and derogatory way to say it. respect Deaf Culture and dont associate failure to understand with failure to hear.