Google earnings disappoint analysts while ad revenue continues to grow

Apple blew investors out of the water with its record earnings. So did Facebook. Google, on the other hand, fell short of analysts predictions with its fourth quarter earnings rounding up to US$18.10-billion, up 15% from last year this time. If the numbers are going up, why are investors still yawning at these numbers?

Advertising via Google accounted for 89.2% of the company’s revenue in the fourth quarter and 89.5% of its revenue for all of fiscal 2014. Most of this cash comes from Google’s own sites (YouTube, Gmail, Google Search, etc.).

More people, over the last year, have been engaging with Google ads with paid clicks on Google sites going up 25%.

Even though the web conglomerate’s piggy bank just got bigger, it’s still less than what analysts predicted when you subtract what Google is spending to drive overall advertising traffic.

As the good guys at Forbes point out, revenue minus traffic acquisition costs was US$14.48-billion, compared to the US$14.61-billion analysts were estimating.

Investors want to know when a return on all Google’s “other” projects will start to pay off.

A recent example of its ambitious “moonshot” investments was the recent US$1-billion investment in SpaceX to join the founder Elon Musk on a journey to build internet satellites in space.

Read more: Google invests $1 billion in SpaceX as 21st century Space Race heats up

This is not to mention its self-driving car project and Google Glass experiment. The latter, which left an air of anti-climax, were discontinued. According to The New York Times, costs in this sector rose to US$2.8-billion from US$2.1-billion in the same quarter a year ago.

Google wants to be more than an ad agency but it’s yet to see a return to keep a smile on investors’ faces.