January 22, 2013, 4:05 PM

Google paid clicks increase 24% in Q4

The search giant reported a nearly 7% increase in net income.

Thad Rueter

Senior Editor

Lead Photo

Google Inc.’s paid clicks during the fourth quarter ended Dec. 31, 2012, increased 24% compared with the same period last year, the search giant reported today. Paid clicks increased 9% in the fourth quarter compared with the third quarter of 2012.

During the fourth quarter of 2012, Google’s average cost per click decreased 6% compared with the same period in 2011. The average cost per click in Q4 increased 2% when compared with the third quarter of 2012.

Google, which makes most of its money from the paid search ads retailers and others place on search results pages, reported consolidated revenue of nearly $14.42 billion for the fourth quarter, up 36% compared with the same period last year. Excluding Motorola Mobile, the mobile phone maker that Google bought last year, Google’s Q4 revenue stood at $12.91 billion, up 21.9% from about $10.59 billion during the same period in 2011.

Google reported nearly $2.89 billion in net income in the fourth quarter of 2012, up 6.6% from $2.71 billion in the fourth quarter of 2011.

For the fourth quarter of 2012:

• Google-owned sites, such as the Google.com search engine and YouTube, contributed 67%, or approximately $8.64 billion of revenue (excluding Motorola Mobile), during the fourth quarter of 2012, up 18% from the revenue from the same period a year ago.

• Google reported a 19.4%  increase in Google network revenue to approximately $3.44 billion from $2.88 billion a year ago. This is revenue Google receives from clicks on ads it places on the web sites of other companies, including retailers’ sites.

• Google’s traffic acquisition costs, or TAC—that is, the portion of revenue Google pays to web sites that host Google ads—increased to $3.08 billion in the fourth quarter, up 25.7%  year over year from $2.45 billion. TAC as a percentage of advertising revenue was approximately 25% in the fourth quarter of 2012, up from 24% a year earlier.

• Google also said that its revenue from outside the United States represented 54% of total revenue in the fourth quarter, up slightly from 53% in the fourth quarter of 2011, and 53% in the third quarter of 2012.

“We ended 2012 with a strong quarter,” says CEO Larry Page. “In today’s multi-screen world we face tremendous opportunities as a technology company focused on user benefit. It’s an incredibly exciting time to be at Google.”

For the full year, Google reported:

• Revenue of approximately $50.18 billion, up 32.4% from 2011.

• Net income of nearly $10.74 billion, up 10.3% from $9.74 billion for the full year 2011.

Google also says it employs 53,861 workers, of whom 37,544 work for Google, 11,113 for Motorola Mobile, and 5,204 for Motorola Home, a unit that provides technology for using the Internet and networking technology in the home. Google announced last month plans to sell Motorola Home to Arris Group Inc. for $2.35 billion.

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