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Your eyeballs bagged Google $50 BEEELLION in 2012

Estimate-beating Q4 capped record revenue year

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Haters who gloated over the surprise dip in Google's revenues last quarter can stop now, as the Chocolate Factory has posted strong results for its fourth quarter and for fiscal 2012 as a whole.

For the twelve months that ended on December 31, 2012, Google brought in an impressive $50.2bn in revenue, the company said in a statement – a new high, and an eye-opening 32.3 per cent increase over the online giant's fiscal 2011 results.

Revenues for the fourth quarter were $14.42bn, which was up just slightly from last quarter's $14.1bn, but a healthy 36 per cent increase over its results for the fourth quarter of 2011.

More critically for investors, the fourth quarter saw profits return to healthy levels, with net income of $2.89bn or $8.62 per share, compared to $2.71bn in the previous year's quarter.

That 6.6 per cent gain was welcome news, since last quarter saw Google's income slump to just $2.18bn. The dip seems to have done little to slow the company's overall growth, though, as its annual profits were $10.73bn for fiscal 2012, a 10.3 per cent gain over its $9.74bn profit for 2011.

Google's non-GAAP profit for the fourth quarter was $10.65 per share, beating most estimates. The 30 analysts polled by Yahoo! Finance expected the online ad-slinger to earn $10.52 per share, on average, while MarketWatch's 38 prognosticators predicted $10.57 per share.

Of its fourth quarter revenues, Google's online businesses brought in $12.91bn, while its Motorola Mobile division – including its hardware and other businesses – accounted for another $1.51bn, or 10.5 per cent of the total.

Revenue from Google's online businesses in the quarter was up 22 per cent over Q4 2011, driven mostly by growth in advertising. Of the total, 67 per cent or $8.64bn came from Google's own sites, while another 27 per cent or $3.44bn came from advertising on Google's network of partner sites. The remaining 6 per cent, just $829m, was attributed only to "other revenues."

The number of paid clicks, both from Google's own sites and those of its partners, increased 9 per cent since the third quarter and was up 24 per cent year-on-year.

More worrying, however, Google's average cost-per-click – meaning the amount it earns for each of those clicks – was down 6 per cent over the previous year's fourth quarter (though it was up 2 per cent from Q3).

That decline is part of a trend in Google's advertising business. In Q4 of 2011, the company reported an 8 per cent drop in cost-per-click from Q4 2010, and subsequent quarters have shown similar year-on-year shrinkage. But at least this quarter's decrease isn't as bad as last quarter's, when Google reported a 15 per cent dip in cost-per-click over the previous year.

Google's traffic-acquisition costs – the payments it makes to affiliates to bring traffic to its sites – also rose to $3.08bn, up from $2.45bn in last year's Q4. That's equal to 25 per cent of its advertising revenue, while the figure was 24 per cent in Q4 2011.

If there seems to be some creeping softness in Google's advertising business, however, it didn't bother investors, who seemed otherwise pleased with the search giant's strong results. Google's shares rose 4.86 per cent in after hours trading following its earnings conference call, to land at $737.01. ®

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