Google's zest for innovation and newer markets has costed it a dip in the third quarter earnings of this financial year. The hiring of three thousand more employees has also added to the dip. The results which came in on Thursday saw the search giant's stock drop by 2.4 percent, or $12.92, to 524 dollars in extended trading. Google’s shares had already plunged by 4 percent this year.
The search engine's digital ad network which is powered by its dominant search engine has constantly been delivering profits that have been keeping the interests of its investors high over the years.
According to Larry Page, Google's CEO, the company needs to sacrifice some short term gains and goals so that it can invest in projects and other researches that could take a long time to take off or make money. The CEO described these small dips and risky initiatives as “moon shots”. Page further defends these steps by pointing out the fact that company might not have ever been able to develop its Chrome Web browser and Android mobile software if it hadn’t gone out on a limb.
The search giant is currently working on a string of innovations like Internet beaming balloons, driverless cars, Internet connected eyewear and a fleet of drones.
As far as investors are concerned, exploring new technologies always prove to be expensive for them. This is one of the reasons why the San-Francisco based search giant's operating expenses increased by a whopping 30 percent from a year earlier to 5 billion dollars in the third quarter, this is after subtracting the employee stock compensation costs. These rising expenses brought Google’s third quarter revenue to $16.5 billion.
A big percentage of the rising expenses were spent on hiring more employees. Some 3,000 employees were hired in the third quarter which was roughly double the number of employees hired last year at the same time.
In what could be assumed as a positive sign, the search giant's average ad prices in the third quarter dipped by a mere two percent from last year. This is the smallest dip in the prices paid to the search giant for the advertisements which appear alongside search results and other content on the web.
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