Google has spent the last few months arguing to others who will listen that its new advertising businesses including ads with images and video and on cell phones will fuel its next phase of growth. On Thursday, the company finally gave some numbers to support that claim.
Search advertising revenue still drove Google’s better than expected performance in the last few months, when revenue climbed 23% and net income rose 32%. But for the first time Google said on a call with analysts, display ads non text ads with images and video on YouTube and other Web sites are on track to generate more than $2.5 billion in revenue in the coming year, while mobile ads are on track to contribute another $1 billion.
Still, it’s getting $3.5 billion in revenue from the new types of advertising is a small piece of the $30 billion in annual revenue expected from Google, and not yet big enough to significantly affect its financial results. The results beat the expectations of Wall Street analysts, and Google’s stock price rose about 9 percent in after-hours trading.
Because Google’s search revenue is so large, it needs to go after even bigger ad businesses to move the needle, said Colin W. Gillis, a technology analyst at BGC Partners.
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