Tomahawk, WI 11/08/2013 (BasicsMedia) – The leading search engine company Google Inc (NASDAQ:GOOG) has four revenue segments namely desktop search, mobile search, Google Display Network and You Tube. After the company missed its net ad revenue expectation in seven of the past eight consecutive quarters, focus has turned to the performance of the individual revenue segments.

Investors may be interested to know which of these identified four ad revenue segments is declining and which one can be relied on to offset the ad revenue decline. Google makes its money from ads and lately it has entered hardware market with its Nexus and Google Glasses gadgets and is also set to feature in the lucrative internet radio and music services business. However, all these are still on their infant stage and have yet to generate significant revenue for the company.

Dissecting the Mountain View-based company’s revenue reveal that its desktop ad revenue has been on a decline and this decline is predicted to continue into the coming year and perhaps beyond. Thankfully, mobile search revenue is promising and looks able to offset what the company is losing on the desktop segment.

Google ads revenue in review

This year, the desktop ad revenue is expected to come in at $33.2 billion, flat from the previous fiscal year. The same figure is expected in the next fiscal year. Meaning that for Google, the desktop revenue is estimated to remain flat.

On the other hand, the revenue from mobile search is expected to grow exponentially by 100% to hit about $9.5 billion this year on gross basis. The mobile revenue is expected to rise to $16.1 billion (a 70% increase) in the next fiscal year. The growth in mobile revenue is largely due to increase in smartphone and tablets uptake in the market and the flocking of more people to access the internet on their hand-held devices. It thus goes without saying that mobile ad revenue will continue to gap up as long as more people buy smartphones or shift to accessing internet services on their mobile devices.

Other Google ad revenue earners

While mobile search and desktop search are considered the major revenue earners of Google, You Tube and Google Displays Network also look very promising in the coming years. For example, You Tube revenue has shown the potential to gap up by 36% to generate $6.6 billion this fiscal year. In the next fiscal year 2014, this segment looks like hitting $8.6 billion, reflecting 30% growth. As for Google Display Network, revenue this year is expected to come in at $1.3 billion, reflecting 50% increase from last year. In 2014, this segment is expected to generate $1.7 billion or gap up 40%.

It is important for investors to note that Google as a company does not break down its revenue along these segments, instead, it issues combined figures. The picture that comes from the four revenue segments is that Google is having one window of opportunity declining while three are opening which essentially means that its future in business is secured. Moreover, the company’s entry into hardware business riding on its towering reputation and heavy financial muscles are set to boost its top line while improving the bottom line. The company’s shares are currently trading strongly above $1000.

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