Every quarter Google reports a drop in revenues per click — compared with the prior year — of around 20%. This has been going on for years. Google always manages to outpace its falling per click revenues by selling more ads in more places. But is this a sustainable business model?
The recent financial report could be a sign of cracks in the company’s growth strategy.
Google said that the largest drivers of revenue growth in Q1 included mobile ads. But how many ads can Google show on a mobile screen? Is Google running out of places to sell and show more ads?
The company has been trying to hedge its future by building other business outside of advertising such as its Cloud IT services. These non-advertising businesses reported Q1 revenues of $5.4 billion — missing Wall Street estimates of $5.67 billion. And “Other bets” such as the Waymo self- driving cars venture reported a loss of $868 million