The latest earnings reports from Google and Microsoft underscore just how difficult it is to pivot a successful business from traditional online to mobile. Google, while still racking up strong online ad numbers, continues to struggle in mobile. And Microsoft, as it readies Windows 8 and its next big push into mobile, registered its first ever loss in the company’s history.
First Google. The Wall St Journal reports
that despite strong ad performance and an increase in revenue, Google still can’t quite get a handle on mobile. Its average price per ad click dropped for the third quarter in a row, and fell by 16 percent compared to the same quarter last year—a decrease attributed to downward pricing pressure from mobile, which garners far lower per-click prices. Microsoft, for its part, registered its first loss just as it seems to be getting its footing in mobile. The Telegraph reports
the software giant’s errant U.S.$6.3 billion purchase of aQuantive in 2007—an attempt to match Google’s online advertising prowess—didn’t pan out, forcing Microsoft to a U.S.$6.2 billion write-down and a loss overall. Microsoft is hoping its upcoming Windows 8 mobile OS will help it make a stake in mobile, an environment where it has always played a distant third (or fourth) to Apple’s iOS and Google’s Android.
Yankee Group Research VP Carl Howe comments
“We now live in a future unimaginable in 2000: Apple is the biggest technology company in the world, Microsoft is losing money, and Google no longer seems invincible in advertising. Today’s trillion dollar mobile economy represents a bigger opportunity for tech companies than the PC world ever did, but it also has introduced new players vying for control. What is clear, though, is that no matter how successful companies were in the PC era, that success doesn’t translate over to mobility. Mobile is a completely different game."