SAN FRANCISCO -- Google reported second-quarter sales below analyst estimates as advertisers continue to switch to reaching consumers through smartphones and tablets instead of desktop computers, driving down average prices.
The miss sent Google shares plunging 5% in after-hours trading.
Revenue, excluding commissions paid to advertising partners' sales, was $11.1 billion, falling short of the $11.4 billion that analysts expected.
Google has been making efforts to make it easier for advertisers to reach consumers on smaller mobile screens, but in the second quarter its average cost per click declined 6%. In February, Google took the wraps off a new push to get advertisers to buy more ads on mobile devices. The program becomes mandatory later this month. Google is also wooing users to its mobile services in an effort to boost advertising.
Still, said Colin Gillis, an analyst at BGC Partners, "Google still has a massive mobile problem. And the core business is slowing down."