At first glance, Google is doing pretty well with 20 percent more revenue and $2.8 billion in profit recorded for the third quarter of 2014.
However, investors are clearly miffed, considering a slight drop in profit. A sharp rise in research and development expenditure is the primary reason for this decline, along with an increase in employees at the search engine giant. In fact, the number of employees increased by about 3,000 in the last quarter alone. Another reason for the profit drop is a decline in online advertising prices. The average cost per click (CPC) on Google ads has been falling for over two years. In the third quarter, the CPC fell by two percent. The last positive change occurred in the third quarter of 2011 (5 percent rise). All quarterly figures are from Google. To read more, click here.
This chart shows the year-over-year change of the average cost per click on Google ads.
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