Google (NASDAQ:GOOG) CEO Larry Page said he's "really excited" about Motorola Mobility's forthcoming Moto X smartphone and other mobile products, but he batted away speculation that Google will spend half a billion dollars to market the new gadget.
The Moto X is one of several smartphones Motorola is expected to unveil by October. Google will reportedly spend upwards of $500 million in marketing the Moto X, according to a recent Wall Street Journal report.
Page directly addressed the speculation about the marketing budget during the company's earnings conference call, and said Motorola is "doing things that are normal for that business." While he did not confirm or deny the $500 million figure, he said "probably too much has been made over those things," according to a Seeking Alpha transcript.
Motorola has said that customers will be able to customize the Moto X smartphone to their liking. Although the company has not provided any other details about the phone--including how it can be customized, what it will look like, when it will launch and how much it will cost--Motorola has embarked on a major new advertising campaign for the device, which will be assembled in a plant in Ft. Worth, Texas.
As for Motorola's second-quarter financials, Google said Motorola had revenue of $998 million in the quarter, up from $843 million in the second quarter of 2012. However, Google is still running the unit at a loss--Motorola's business posted a GAAP operating loss of $342 million, wider than its operating loss of $199 million in the year-ago period.
Overall, Google posted earnings of $9.56 per share on net revenue of $11.1 billion in the second quarter, which fell below analyst expectations of $10.80 per share on net revenue of $11.4 billion. Further, the company's "cost-per-click," or the price that advertisers paid Google for every time someone clicked on an ad linked to a Google site, fell by 6 percent from a year ago. Analysts had expected the metric to fall by just 3 percent.
"The CPC drop is a bit surprising, and perhaps raises again the question of whether Google really benefits from the mobile shift," RBC Capital Markets analyst Mark Mahaney told the Journal.
In February Google overhauled its AdWords platform to reach consumers across all device screens. The revamp was designed not only to increase Google's mobile ad revenue but also to help merchants manage integrated campaigns stretching across multiple connected devices. Google said it has moved 6 million advertising campaigns to the new platform, and expects to get the remainder converted by the end of the month. Nikesh Arora, the company's chief business officer, said "it is an existential requirement for us to move our advertisers." In the long-term, he said, the shift should result in simpler, faster and better ads for advertisers. For more on this story, click here.
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