October 17, 2013, 4:56 PM

Google’s paid clicks jump 26% in Q3

The average cost per click decreased 8% year over year in Q3.

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Google Inc.’s paid clicks increased 26% year over year in the third quarter ended Sept. 30 and 8% quarter over quarter, the company said today. Average cost per click decreased 8% year over year in Q3 and 4% from the second quarter.

The search giant’s total consolidated revenue in Q3 reached $14.89 billion, up 12.0% from $13.30 billion in Q3 2012. Of that, its mobile phone maker subsidiary Motorola Mobility accounted for $1.18 billion, or about 8% of consolidated revenues, compared with $1.78 billion, or 13% of consolidated revenues in the third quarter of 2012, Google said.

Motorola posted an operating loss of $248 million in the third quarter, compared with a loss of $192 million in Q3 2012. Google in the third quarter launched its first new mobile phone, the Moto X, out of Motorola, which Google acquired in May 2012. Motorola Mobility is now building out its marketing and distribution, Google CEO Larry Page told analysts in an earnings call this afternoon.

Google also launched a cross-device measurement and analytics online marketing tool in the third quarter. “We want to remove friction when people are buying online or in the real world,” Page said. Google also is incorporating more information about same-day shipping and local inventory results in its shopping search results, he added.

For the third quarter, Google also reports:

• Net income of $2.176 billion, down 32.6% from $3.228 billion in Q3 2012.

• Google-owned sites, such as the Google.com search engine and YouTube, contributed $9.39 billion, or approximately 68% of revenue, excluding Motorola. That’s up 21.4% from $7.73 billion in the same period a year ago.

• A 1.3% year-over-year decrease in Google network revenue, to approximately $3.15 billion from $3.19 billion the same period a year earlier. 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—that is, the amount Google pays to web sites that host Google ads—increased to $2.97 billion in the second quarter, up 7.2% year over year from $2.77 billion in Q3 2012, though they were down 1.3% quarter over quarter, from $3.01 billion in Q2.

• International revenue for Google segments, including from Google sites, networks and other activities like hardware sales, of $7.674 billion, up 25.6% from $6.110 billion in the same period a year earlier. International revenues represented 56% of Google’s total segments revenue in Q3, compared with 55% in Q2 and 53% in Q3 2012. Of that, the United Kingdom accounted for $1.39 billion of total segments revenues ($13.77 billion), down from 11% in Q3 2012.

Video advertising has increasingly been making up more of Google’s overall advertising revenue, growing by 75% year over year, Nikesh Arora, senior vice president and chief business officer at Google, told analysts on the call. And that traffic is becoming more mobile—on YouTube, 40% of all traffic today comes from mobile devices, up from 6% two years ago, Page said. On Android mobile apps, shoppers who pay with their Google Wallet convert four times as often as those who don’t, Nikesh said.

According to a report by market research firm The Search Agency, 31% of clicks on Google Product Listing Ads in Q3 came from smartphones and tablets.

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