Google (NASDAQ:GOOGL) shares opened higher this morning and rightfully so. The world's leading search engine posted better-than-expected fourth-quarter results.
However, let's not assume that it's a perfect report. There are a few numbers that either need clarification or are worth heeding. Let's check them out.
- $14.42 billion: This is Google's revenue for the quarter, up a healthy 36% over the past year. Big G points out that it would have been $15.24 billion -- up an even better 44% -- if it included the Motorola Home division that it just unloaded. However, that doesn't mean that the $14.42 billion is organic. That still includes the balance of Motorola Mobility that wasn't on the books a year ago. Back out Motorola for a clearer picture, and Big G's revenue increased 22% to $12.91 billion. That's still a solid showing, but it's the more accurate snapshot.
- Negative 6%: Cost-per-click -- or the average amount that an advertiser plaid for a click-through lead on Google -- has fallen 6% over the past few year. The dot-com darling is able to make it up in volume. It generated a welcome 24% spike in clicks, but things could get interesting if this becomes an arms race. Baidu crushed Google in China a couple of years ago, and the online speedster has set its sights on the global marketplace. It's been tiptoeing into neighboring countries, and may be a global force sooner rather than later. Facebook (NASDAQ:FB) is an even bigger threat with last week's rollout of Graph Search. The leading social networking website's ability to scour through friends -- and friends of friends -- for relevant queries finds Facebook playing a game that no one else can play better. This new search function is going to make Facebook stickier, something Google doesn't need.
- $48.1 billion: Google closed out the quarter with more than $48 billion in cash and marketable securities, but it's not as easy as dividing that into the nearly 335 million diluted shares outstanding and pointing to a cash cushion more than $143 a share. A lot of that money has been earned overseas, and that's where it remains until Google is willing to take a big tax hit to repatriate those profits. Why do you think Google's effective tax rate this quarter was a mere 18%?
- $3.08 billion: As anyone that has come across non-Google sites wallpapered with Google-served ads, there's more to the company's business than populating its own website with ads. Just two-thirds of Google's revenue stems from its owned sites. A good chunk of the rest comes from revenue-sharing deals, and $3.08 billion is what Google shelled out in traffic acquisition costs. It's clearly worth it for Google. It expands its reach, and perhaps more importantly keeps Microsoft's Bing away. Big G truly is a one-stop solution for advertisers. However, traffic acquisition costs have climbed from 24% of Google's revenue to 25% over the past year. Mobile migration is a part of that, and investors will want to keep an eye on that metric in the future.
It all adds up to a solid report in the end, but it's important to pay attention to what individual numbers are telling investors about the world's leading online advertising company.
Longtime Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends Baidu, Facebook, and Google. The Motley Fool owns shares of Baidu, Facebook, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.