Google and Microsoft miss forecasts

New york – Two of the world’s biggest technology companies, Google and Microsoft, have badly missed earnings expectations for the second quarter.
Sales of Microsoft’s Surface tablet were disappointing in the second quarter. Net photo
Sales of Microsoft’s Surface tablet were disappointing in the second quarter. Net photo

New york – Two of the world’s biggest technology companies, Google and Microsoft, have badly missed earnings expectations for the second quarter.

Google reported profits of $9.7b, up 16 per cent from a year ago, but less than analysts were expecting.

Microsoft made $4.5b in the second quarter, but announced that it would take a $900m charge relating to poor sales of its Surface tablet.

Shares in both companies fell by more than 4 per cent after the shortages were announced.

Declining personal computer sales - which recently saw their longest slide in five years - have hurt Microsoft’s efforts to boost its business with the sale of its Windows 8 operating software. Last week, the company also announced that it would cut the price of its Surface tablet amid sluggish sales.

More mobile

While Google’s profits were up by more than 16 per cent since last year, the company missed analyst expectations.

The main driver of Google,s profits - advertising revenue - was up 15 per cent. More of Google’s advertising revenues is coming from mobile adverts, which are cheaper.

While the company has been adapting, the change has hurt Google’s bottom line.

Chief executive Larry Page said adapting to mobile was a challenge the company was embracing.

“The shift from one screen to multiple screens and mobility creates tremendous opportunity for Google,” he said.

On a conference call to discuss earnings, Page mentioned the company’s revamped AdWords programme, which has been well-received.

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