New Google Disclosures Show Strength of Own Websites

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  New Google Disclosures Show Strength of Own Websites
  
  

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• ALISTAIR BARR
 
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Google revealed new details about its advertising business on Thursday that highlighted the strength of its own websites, such as google.com and youtube.com, compared with other sites where it places ads.

Until now, Google has reported two numbers about ads: how many clicks the ads draw and the average cost per click. Now, after some prodding from the Securities and Exchange Commission, Google is reporting the figures separately for its own sites and its network business, which includes websites owned by other companies.

Google said the number of paid clicks jumped about 33% on its own sites in the second quarter, compared with a year earlier, but just 9% on network sites. Analysts at Citigroup were expecting increases of 28% and 10% respectively.

The average price advertisers paid for those clicks on Google sites fell 7% from a year earlier, while the decline on network sites was 13%, the company also said. Citigroup analysts were calling for declines of 5.5% and 6.5% respectively

The new numbers show that Google’s own websites are performing much better than its network business. That is likely because Google’s dominant online search business mostly revolves around its own google.com website and demand for search ads is still healthy.

In contrast, display ads are suffering as more people use mobile devices to access the Web. The smaller screens of smartphones leave less space than PCs for display ads. That makes advertisers less willing to pay up for mobile ads. Google’s network business houses most of the company’s display ad business.

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