Google’s argument for why it shouldn’t have to break out mobile revenues is because it’s not sure how to differentiate one mobile platform from the next.
“It is increasingly challenging to define what exactly a ‘mobile’ platform is from period to period — and what it will be going forward,” Google wrote in a letter to the Securities & Exchange Commission.
The letter was in response to an SEC inquiry that asked Google to disclose advertising revenue generated from mobile devices, like Facebook and Twitter.
In protest, Google argued that platforms for viewing ads are a moving target, so who knows , in the future, we could be talking about “refrigerators, car dashboards, thermostats, glasses and watches.”
“Our expectation is that users will be using our services and viewing our ads on an increasingly wide diversity of devices in the future, and thus our advertising systems are becoming increasingly device-agnostic,” it said. “We expect the definition of “mobile” to continue to evolve as more and more ‘smart’ devices gain traction in the market.”
When taken out of context, it does seem a little absurd that Google, which builds operating systems for mobile devices, couldn’t come up with a plausible definition for what mobile is, but it’s something the industry — as relatively short as it has been — has already grappled with.
Google provides a brief summary of this history, explaining that initially “most industry observers would have included tablets (in addition to handsets) in their definition of ‘mobile’…However, as tablets gained momentum in the market, it became clear to us that their usage had much more in common with desktops than with handsets.”
The discussion all stems from a SEC request that asks Google to quantify the impact of the changes in revenue that caused a 6 percent decline in average-cost-per click paid by advertisers. While Google declined to break out mobile revenues, it did disclose that the 6 percent decline was primarily due to an ad product change (that related to mobile) and movements in foreign currency rates.