Google’s first-quarter revenue fell short of Wall Street targets and margins narrowed as the price of its ads continued to decline. The number of “paid clicks” by consumers on Google’s ads increased by 26% in the first quarter, disappointing some analysts who had hoped for stronger volume growth. And the average “cost per click” declined 9%, extending a downward trend as mobile advertising, typically cheaper than traditional online ads, make up a bigger slice of its business.
Despite raking in $15.4 billion, decreasing cost per click for the tech giant’s search ads caused it to miss revenue and profitability estimates. Google missed analyst expectations in its first quarterly earnings report of the year because of declining cost-per-click rates for its search ads and rising costs to ensure its search engine is used on various platforms. The tech giant brought in $15.4 billion in revenue, a 19% jump from a year earlier that still missed analyst expectations of $15.54 billion. Earnings per share were $6.27, off the mark from analyst expectations of $6.41 per share. The cost-per-click rate that Google charges businesses to place ads in its search engine was down 9% year over year, though it was flat compared with the fourth quarter of 2013.
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