Google in race to find new revenue streams as search stalls

It’s tough in the tech market these days and not just for the likes Yahoo, whose founder Jerry Yang departed this week, and BlackBerry owner RIM which is believed to be seeking a rescue from Samsung.

Now even the mighty Google has shocked Wall Street investors by reporting an eight per cent decline in its all-important cost per click, a clear sign that the search business (from which it makes 90 per cent plus of its profits) is struggling.

CEO Larry Page (pictured) put a brave face on things, claiming its “big bets are really paying off” as display ads sales increased again to an annual $5bn. He also claimed new social media offer Google+ was ahead of expectations.

But Google’s costs rose 35 per cent to a staggering $3.38bn in the final quarter of 2011 as it added over 1,000 staff in what looks an increasingly desperate race to find the new big revenue streams it needs.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.