Google results reveal struggle to make money from mobile ads

For more than a year, Google has been struggling to solve this riddle: even though people are using Google on their mobile devices more than ever, how can the company make more money from mobile ads?

Despite a range of efforts by Google, the riddle remains unsolved, its financial report on Thursday said.

Google reported second-quarter results that missed analysts' expectations for revenue and profit. They showed that its desktop search business continues to slow and ad prices continue to fall as it struggles to make as much money on mobile devices.

It is a vexing problem for every company that has generated revenue through advertising, be it a century-old magazine with a mobile app or a new website aggregating the news. Mobile ads do not command the premium that web advertising does (and web ads do not make as much as print ads).

Google's shares, which fell 1 per cent before the report on Thursday, fell another 4 per cent in after-hours trading.

"One of the reasons why people like Google is you can look forward and see what they're doing with Glass and laying fibre and driverless cars and Chrome, chasing after new revenue streams," said Colin Gillis, a technology analyst at BGC Partners. "But those are still pretty far away. Google's core business is all about advertising and clicks, and the core business is absolutely maturing."