GOOG: Google's paid clicks keep surging; ad prices remain under pressure

Google's paid clicks keep surging; ad prices remain under pressure • 4:31 PM

• Google's (GOOG) paid click growth, boosted by mobile search activity and product listing ads (PLAs), continued to accelerate in Q4, rising 31% Y/Y after growing 26% in Q3 and 23% in Q2.
• At the same time, mobile and PLAs continue taking a toll on ad prices: cost per click fell 2% Q/Q and 11% Y/Y after dropping 8% Y/Y in Q3 and 6% in Q2.
• Google Sites revenue (67% of revenue exc. Motorola) rose 22% Y/Y, the same as Q3. Ad network revenue (23% of total), pressured lately by policy changes meant to improve the user experience, rose 3% vs. 1% in Q3. Other Google revenue (10% of revenue - Nexus, search appliances) rose 99% vs. 85%.
• Opex was 33% of revenue, even with a year ago. A hefty $2.26B was spent on capex. Free cash flow was $2.98B, less than net income of $4.1B.
• International sales made up 56% of revenue, flat Q/Q and up from 54% a year ago. Traffic acquisition costs were 24% of revenue, even with Q3 and down from 25% a year ago.
• Ahead of the Lenovo deal, Motorola Mobility had Q4 revenue of $1.24B (-18% Y/Y), and an op. loss of $384M.
• Google ended Q4 with $58.7B in cash/investments (much of it offshore), and $5.5B in debt.
• Investors take the numbers in stride, GOOG +0.1% AH. CC getting started.
• Q4 results, PR, slides

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