Almost $15 billion may have poured into Google’s coffers during the third quarter of this year–and $2.97 billion of that is profit. However, there’s a bit of a dark cloud on the horizon: its Motorola division.
Google released its earnings report yesterday, with Larry Page telling investors that its “great product progress” boded well for the once-small startup that was born in a Menlo Park garage. “We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device.”
With almost a quarter of a billion in losses–$248 million–the firm’s mobile handset division, Motorola, is not looking great (the unit made a loss of $192 million in the same quarter of 2012). This comes despite the release of its Made In The U.S.A. phone*, the Moto X, which cost the firm $500 million in promotion alone. Given that the mere fact of making the phone in the U.S. increases its labor costs threefold, compared to assembling it in China, that’s another reason why the division’s losses are up almost a quarter.
While cost per click declined 8%, paid clicks were up 28% year on year, and 8% from the last quarter. But the news which will give the firm–and investors–a real fillip is that mobile use of YouTube has increased by a huge amount. In 2011, it accounted for 6% of the video site’s traffic; last year, 25% of traffic. And this year? A not-to-be-sniffed-at 40%. Stock last night closed at a record high.
*You can see a Google Street View of its Fort Worth factory here.